Question

In: Advanced Math

The interest rate on a $100,000 loan is 7.5% compounded quarterly. What quarterly payments will reduce...

The interest rate on a $100,000 loan is 7.5% compounded quarterly. What quarterly payments will reduce the balance to $75,000 after five years? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Expert Solution

first we need to find the loan term t

here we have

L=loan amount = 100000

r=7.5% = 0.075

n=4 for quarterly payment

t=?

PMT=?

.....................(1)

.

after 5 years, unpaid balance is L=75000

so remaining time is

L=75000

r=7.5% = 0.075

n=4 for quarterly payment

t=?

PMT=?

put the value of PMT from equation 1

....................loan term

.

now put the value of t in equation 1

..................quarterly payment

Colby Messinger answered 1 month ago

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