$7500 was borrowed for a four-year term at 9% compounded quarterly. The terms of the loan allow prepayment of the loan basedon discounting the loan's maturity value at 7% compounded quarterly. How long (to the nearest day) before the maturity datewas the loan prepaid if the payout amount was $9380.24 including accrued interest? For the purpose of determining the numberof days in a partial calendar quarter, assume that a full quarter has 91 days.

Notes are issued based on the stated interest rate and they can be discounted back at lower interest…

Answered: 7500 was borrowed for a four-year term…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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7500 was borrowed for a four-year term at 9% compounded quarterly. The te discounting the loan's maturity value at 7% compounded quarterly. How 1 as the loan prepaid if the payout amount was $9380.24 including accrued in days in a partial calendar quarter, assume that a full quarter has 91 days.