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
: :	: :	: :	: :	: :
: :	: :	: :	: :	: :

				0.00
Total

Expert Solution

a.	Size of payments	=-pmt(rate,nper,pv,fv)
		$ 1,129.06


	Where,
	rate	=	6.50%/4	=	0.01625
	nper	=	8*4	=	32
	pv			=	$ 28,000
	fv			=	0


b.	Amortization Schedule:

	Payment	Payment	Interest	Principal	Principal
	Number		Portion	Portion	Balance
	0				$ 28,000.00
	1	$ 1,129.06	$ 455.00	$ 674.06	$ 27,325.94
	2	$ 1,129.06	$ 444.05	$ 685.02	$ 26,640.92



	Working:
	Payment	Beginning Principal	Amount Paid	Interest	Principal	Ending Principal
	Number	Balance		Portion	Portion	Balance
		a	b	c=a6.50%3/12	d=b-c	e=a-d
	1	$ 28,000.00	$ 1,129.06	$ 455.00	$ 674.06	$ 27,325.94
	2	$ 27,325.94	$ 1,129.06	$ 444.05	$ 685.02	$ 26,640.92

jeff jeffy answered 1 year ago

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