A loan is amortized at j₂ = 12% with semi-annual payments of $R.The outstanding balance of the loan after 13 payments is $7049.29 and the outstanding balance after 14 payments is $6377.10.What is R?

Question

Quizplus · Accepted Answer

The difference in the outstanding balances after the 13th and 14th payments is the amount of the 14th payment that goes towards reducing the principal. The interest portion of the 14th payment is calculated using the outstanding balance after the 13th payment and the semi-annual interest rate. Solving for R gives $1095.15.

A Loan Is Amortized at J2 = 12% with Semi-Annual

A Loan Is Amortized at J₂ = 12% with Semi-Annual