Answered: The following loan is a simple interest…

The following loan is a simple interest amortized loan with monthly payments. (Round your answers to the nearest cent.) $4000, 9.5%, 4 years (a) Find the monthly payment. (b) Find the total interest.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

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The following loan is a simple interest amortized loan with monthly payments. (Round your answers to the nearest cent.)

$4000, 9.5%, 4 years

(a) Find the monthly payment.

(b) Find the total interest.

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