Jim takes out a $10,000 loan at j₄ = 10%,to be paid back with quarterly payments over 5 years.At the end of 2 years,the outstanding balance is $6,580.07.At that time,Jim makes a lump sum payment of $500 and then refinances the loan at j₄ = 8%.He also intends to repay the remainder of the loan over just 2 more years.What is the new quarterly payment?

Question

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After the lump sum payment, the remaining balance is $6,080.07. Refinancing at 8% quarterly interest for 2 years (8 quarters), the new quarterly payment can be calculated using the formula for an annuity payment. The correct calculation results in a quarterly payment of $829.99.

Jim Takes Out a $10,000 Loan at J4 = 10%,to

Jim Takes Out a $10,000 Loan at J₄ = 10%,to