A5 A 12-year loan is repaid with annual payments at the end of each year. For the first four years, each payment is X; for the next four years, each payment is 3X; for the final four years each payment is 2X. The amount of interest due in the fifth payment is twice as much as the interest due in the 9th payment. Find i, the (non-zero) annual effective interest rate, rounded to two decimal places after converting to a percentage. Please solve using steps and definitions, not Excel spread sheet.

A5 A 12-year loan is repaid with annual payments at the end of each year. For the first four years, each payment is X; for the next four years, each payment is 3X; for the final four years each payment is 2X. The amount of interest due in the fifth payment is twice as much as the interest due in the 9th payment. Find i, the (non-zero) annual effective interest rate, rounded to two decimal places after converting to a percentage. Please solve using steps and definitions, not Excel spread sheet.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

See similar textbooks

Similar questions

A loan of £ 2,120,000 is repayable by equal quarterly payments for 15 years. The effective rate of interest is 6% pa.i. Find the equal quarterly payment amount.ii. Draw the amortization schedule for the loan repayment.iii. What is the interest portion paid on the 10th payment?
Monthly payments are required on a $45,000 loan at 6.0% compounded monthly. The loan has an amortization period of 15 years (Round your answers to 2 decimal places.) a. Calculate the interest component of Payment 137. Interest component $1 b. Calculate the principal component of Payment 76. Principal component c. Calculate the interest paid in Year 1. Interest paid d. Calculate the interest paid in Year 14. Interest paid
Find i (the rate per period) and n (the number of periods) for the following loan at the given annual rate. Semiannual payments of $4,800 are made for 17 years to repay a loan at 7.45% compounded semiannually. i= 0.0372 (Type an integer or decimal rounded to four decimal places as needed.) n=34
A loan is to be amortized by equal payments of P500.00 each at the end of every six months for ten years. Interest is based on 7% compounded semiannually. What is the outstanding debt after eight years? Select one: a. P1,657.88 O b. No answer c. P2,034.29 d. P1,836.54 e. P1,976.87
A loan of $36,999.85 is to be repaid by payments at the end of each quarter for eight years. Each payment is 5% higher than its predecessor. The loan is made at a nominal rate of discount of 4% payable quarterly. Find the balance just after the 20th payment, the amount of interest in the twentieth payment, and the amount of principal in the twentieth payment. (Round your answers to the nearest cent.) balance after 20th payment amount of interest in 20th payment amount of principal in 20th payment
a. Set up an amortization schedule for a $19,000 loan to be repaid in equal installments atthe end of each of the next 3 years. The interest rate is 8% compounded annually.b. What percentage of the payment represents interest and what percentage representsprincipal for each of the 3 years? Why do these percentages change over time?
The interest rate on a $15,300 loan is 9.7% compounded semiannually. Semiannual payments will pay off the loan in nine years. (Do not round intermediate calculations. Round the PMT and final answers to 2 decimal places.) a. Calculate the interest component of Payment 12. $ b. Calculate the principal component of Payment 5. Principal c. Calculate the interest paid in Year 8. Interest paid d. How much do Payments 5 to 8 inclusive reduce the principal balance? Principal reduction Interest
A loan of amount $15560.21 is repaid in 15 annual payments beginning 1 year after the loan is made. The first 6 payments are $1000 each, and the final 9 payments are each $2000. Interest is at an effective annual rate of 5.1%. What is the amount of the principal repayment in the 6th payment?
The interest rate on a $59,000 loan is 8.9% compounded semiannually. Quarterly payments will pay off the loan in twelve years. (Do not round Intermedlate celculatlons and round your final answers to 2 declmal places.) a. Calculate the interest component of Payment 10. Interest $. 1187.03 b. Calculate the principal component of Payment 40. Principal $ 1660.07 c. Calculate the total interest in Payments 29 to 40 inclusive. Total interest $ 6734.03 d. Calculate the reduction of principal in Year 5. Principal reduction $ 4095.68 Mc Graw Hill correct W bo
For a repayments schedule that starts at the end of year 5 at $A and proceeds for years 6 through 40 as $2A, $3A...... What is the value A if the principal of this loan is $100,000.00 and the interest rate is 10% compounded annually?
The interest rate on a $57,000 loan is 10.4% compounded semiannually. Quarterly payments will pay off the loan in fifteen years. (Do not round intermediate calculations and round your final answers to 2 decimal places.) a. Calculate the interest component of Payment 13. Interest b. Calculate the principal component of Payment 50. Principal c. Calculate the total interest in Payments 39 to 50 inclusive. Total interest $ d. Calculate the reduction of principal in Year 4. Principal reduction %24 %24
A loan with interest at 10% converted semiannually is to be amortized by equal payments of P119,764.71 at the end of every six months for nine years. How much is the outstanding principal after the eighth year? Select one: O a. No answer b. P461,493.75 O c. P924,791.34 d. P386,493.71 e. P222,691.75