Question

General Computers Inc. purchased a computer server for $63,000. It paid 40.00% of the value as a down payment and received a loan for the balance at 9.50% compounded semi-annually. It made payments of $2,900.56 at the end of every quarter to settle the loan.

a. How many payments are required to settle the loan?

payments

Round up to the next payment

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				$37,800.00
1
2
: :	: :	: :	: :	: :
: :	: :	: :	: :	: :
Please fill in	Please fill in	Please fill in	Please fill in	Please fill in
Please fill in	Please fill in	Please fill in	Please fill in	0.00
Total	Please fill in	Please fill in	Please fill in

can someone please answer it quickly?

Answer 1

Information given:

Total price - $63,000

Down payment - 40% of 63,000 = 25200

Loan amount - 63,000 - 25,200 = $37,800

Interest rate - 9.5% semi annual compounding

Payment amounts - $2900.56 quaterly

Period interest rate - 9.5/4 = 2.375% per quarter

Number of payments required:

Payments = Principal * rate per period * (1+ rate)^periods / ((1+ rate)^periods - 1)

2900.56 = 37,800 * 2.375/100 * (1+2.375/100)^p / ( (1+2.375/100)^p - 1)

3.231 * ( (1+2.375/100)^p - 1) = (1+2.375/100)^p

3.231 * (1+2.375/100)^p - 3.231 = (1+2.375/100)^p

(1+2.375/100)^p * ( 3.231 - 1) = 3.231

1.02375^p = 3.231/2.231

1.02375^p = 1.4482

P is approx. 16 period or 4 years

Part b)

Completed the schedule:

As the period is a little less than 16 periods, the payment finishes before 16 periods.

Payment - fixed given in the question

Interest - 2.375% of balance

Principal - Payment - Interest

New balance - Previous balance - Principal payment

Payment	Interest	Principal	Balance
2900.56	897.75	2002.81	35797.19
2900.56	850.183263	2050.377	33746.81
2900.56	801.486815	2099.073	31647.74
2900.56	751.633827	2148.926	29498.81
2900.56	700.59683	2199.963	27298.85
2900.56	648.347705	2252.212	25046.64
2900.56	594.857663	2305.702	22740.94
2900.56	540.097232	2360.463	20380.47
2900.56	484.036242	2416.524	17963.95
2900.56	426.643802	2473.916	15490.03
2900.56	367.888293	2532.672	12957.36
2900.56	307.73734	2592.823	10364.54
2900.56	246.157802	2654.402	7710.137
2900.56	183.115749	2717.444	4992.693
2900.56	118.576448	2781.984	2210.709
2900.56	52.504339	2848.056	-637.347

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