Ask Question
16 July, 14:41

You are taking a $5,519 loan. You will pay it back in four equal amounts, paid every 6 months, with the first payment occurring 5 years from now (the payments begin after 5 years). The annual interest rate is 11% compounded semiannually. Calculate the amount of each semiannual payment.

0
Answers (1)
  1. 16 July, 14:52
    0
    The amount of each semiannual payment will be $2549.19

    Explanation:

    Loan amount = $5,519

    Number of payments = 4

    Semi-annual interest rate = 11%/2 = 5.5%

    Let, value of each payment = X

    Payment will take place at the end of 10th (end of year 5), 11th, 12th, and 13th semiannual period.

    5,519 = X / (1 + 5.5%) ^10 + X / (1 + 5.5%) ^11 + X / (1 + 5.5%) ^12 + X / (1 + 5.5%) ^13

    5,519 = X * (1 / (1 + 5.5%) ^10 + 1 / (1 + 5.5%) ^11 + 1 / (1 + 5.5%) ^12 + 1 / (1 + 5.5%) ^13)

    5,519 = X*2.165

    X = 5,519/2.165

    X = $2549.19

    Therefore, the amount of each semiannual payment will be $2549.19
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “You are taking a $5,519 loan. You will pay it back in four equal amounts, paid every 6 months, with the first payment occurring 5 years ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers