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 3 weeks ago

Quarterly payments of $675 are required to settle a loan. The interest rate on the loan...

Quarterly payments of $675 are required to settle a loan. The interest rate on the loan is 9.6% compounded quarterly. Find the amount of a single payment which will settle the debt on January 1, 2018 given the date of the first payment and the date of the last payment. a) April 1, 2011; October 1, 2016 b) July 1, 2019; April 1, 2023 c) January 1, 2005; July 1, 2010 ******* the answers given by the teacher are A.) 22,971.63...

a) A loan of £100,000 is repayable by equal quarterly payments for 4 years. The effective rate of interest is 7% pa.

a) A loan of £100,000 is repayable by equal quarterly payments for 4 years. The effective rate of interest is 7% pa. REQUIREDI. Find the equal quarterly payment amount.II. Draw the amortization schedule for the loan repayment.III. What is the interest portion paid on the 6th payment? IV. What is the total interest paid after the 12th payment?b) Give a brief description of the following types of financial investments and list the risks and benefits associated to each type of...

Amanda took a loan of ???10,000 from a bank at 5% interest rate compounded quarterly. The...

Amanda took a loan of ???10,000 from a bank at 5% interest rate compounded quarterly. The loan is to be amortised by equal quarterly payments over 1year, 3months time. i. Find the regular payment Amanda would make. ii. Construct an amortization schedule for the payment of the loan. A. Amanda took a loan of ???10,000 from a bank at 5% interest rate compounded quarterly. The loan is to be amortised by equal quarterly payments over 1year, 3months time. i. Find...

5. You have a bank loan at 6.75%, compounded monthly with quarterly payments. What is the...

5. You have a bank loan at 6.75%, compounded monthly with quarterly payments. What is the effective interest rate per payment period? 6. You lent $500 to your friend at 10% compounded every 2 months. You have asked her to pay the money back at the end of one year and to make an interest payment every six months (one at the 6 month mark and one at the end). What is the effective interest rate per payment period? 7....

1. what is the effective interest rate for a savings accounting that is compounded quarterly at...

1. what is the effective interest rate for a savings accounting that is compounded quarterly at 8%? 2. a bond has a current market price of $1230.00. it is said to be selling at a a. premium b. discount. c. bonus d. reward 2. bond c has a $1000 face value and provides an 8% semiannual coupon for 15 years. the appropriate discount rate is 10% (annual rate). what is the value of the coupon bond? 3. if the next...

A debt of $30000 with interest at 9.75% compounded quarterly is to repaid by equal payments...

A debt of $30000 with interest at 9.75% compounded quarterly is to repaid by equal payments at the end of each year for 7 years. what is the size of annual payment also construct a payment schedule.

1) The company holds a 6-year loan of $230 000, at 7.5% compounded annually. Payments are...

1) The company holds a 6-year loan of $230 000, at 7.5% compounded annually. Payments are made quarterly. After 15 months, the terms of the loan are renegotiated at 5.5%, compounded monthly with monthly payments for the remainder of the 6-year term. a. Calculate the payment amount for the original loan. b. Calculate the accumulated value of the original loan principal after 15 months. c. Assuming that payments had been made, calculate the accumulated value of the payments made in...

Sophie received a loan of $28,000 at 6.5% compounded quarterly. She had to make payments at...

Sophie received a loan of $28,000 at 6.5% compounded quarterly. She had to make payments at the end of every quarter for a period of 8 years to settle the loan. a. Calculate the size of payments. Round to the nearest cent b. Fill in the partial amortization schedule for the loan, rounding your answers to two decimal places. Payment Number Payment Interest Portion Principal Portion Principal Balance 0 $28,000.00 1 2 : : : : : : : :...

Liz received a loan of $15,000 at 5.50% compounded quarterly. She had to make payments at...

Liz received a loan of $15,000 at 5.50% compounded quarterly. She had to make payments at the end of every quarter for a period of 1 year to settle the loan. a. Calculate the size of payments. Round to the nearest cent b. Fill in the amortization schedule, rounding the answers to two decimal places. Payment Number Amount Paid Interest Portion Principal Portion Principal Balance 0 $15,000.00 1 2 3 4 Total

Ali received a loan of $28,000 at 6.5% compounded quarterly. He had to make payments at...

Ali received a loan of $28,000 at 6.5% compounded quarterly. He had to make payments at the end of every quarter for a period of 8 years to settle the loan. a. Calculate the size of payments. Round to the nearest cent b. Fill in the partial amortization schedule for the loan, rounding your answers to two decimal places. Payment Number Payment Interest Portion Principal Portion Principal Balance 0 $28,000.00 1 2 : : : : : : : :...