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

Expert Solution

a.	Size of payments	=-pmt(rate,nper,pv,fv)
		= $ 3,879.79


	Where,
	rate	=	5.50%/4	=	0.01375
	nper	=	1*4	=	4
	pv			=	$ 15,000
	fv			=	0


b.	Amortization Schedule:

	Payment	Amount Paid	Interest	Principal	Principal
	Number		Portion	Portion	Balance
	0				$ 15,000.00
	1	$ 3,879.79	$ 206.25	$ 3,673.54	$ 11,326.46
	2	$ 3,879.79	$ 155.74	$ 3,724.05	$ 7,602.42
	3	$ 3,879.79	$ 104.53	$ 3,775.25	$ 3,827.16
	4	$ 3,879.79	$ 52.62	$ 3,827.16	0

	Total	$ 15,519.15	$ 519.15	$ 15,000.00

	Working:
	Payment	Beginning Principal	Amount Paid	Interest	Principal	Ending Principal
	Number	Balance		Portion	Portion	Balance
		a	b	c=a5.50%3/12	d=b-c	e=a-d
	1	$ 15,000.00	$ 3,879.79	$ 206.25	$ 3,673.54	$ 11,326.46
	2	$ 11,326.46	$ 3,879.79	$ 155.74	$ 3,724.05	$ 7,602.42
	3	$ 7,602.42	$ 3,879.79	$ 104.53	$ 3,775.25	$ 3,827.16
	4	$ 3,827.16	$ 3,879.79	$ 52.62	$ 3,827.16	0

jeff jeffy answered 1 year ago

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