Leon's Plumbing wishes to pay off a debt of $21,000 in 6 years. What amortization payment would they need to make every three months, at 6% interest compounded quarterly? (Use Table 12-2 from your text)

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The amortization payment is the amount of money that is paid each period to pay off a loan. The formula for calculating the amortization payment is:A = P * (r / n) / (1 - (1 + r / n)^(-nt))where:A = amortization paymentP = principal amountr = annual interest raten = number of compounding periods per yeart = number of yearsIn this case, the principal amount is $21,000, the annual interest rate is 6%, the number of compounding periods per year is 4 (since the interest is compounded quarterly), and the number of years is 6. Plugging these values into the formula, we get:A = 21000 * (0.06 / 4) / (1 - (1 + 0.06 / 4)^(-4*6))= 21000 * (0.015) / (1 - (1.015)^(-24))= 21000 * (0.015) / (1 - 0.7354)= 21000 * (0.015) / 0.2646= $1,048.41Therefore, the amortization payment that Leon's Plumbing would need to make every three months is $1,048.41.

Leon's Plumbing Wishes to Pay Off a Debt of $21,000