A loan is to be repaid with semi-annual payments of $2000 over 8 years,first payment due in 6 months.The interest rate on the loan is j₂ = 10% for the first 3 years and j₂ = 6% thereafter.What is the amount of the loan? (answer to nearest dollar) A)$21,676 B)$22,882 C)$24,439 D)$27,212

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The loan amount can be calculated by finding the present value of the annuity of the semi-annual payments. For the first 3 years (6 payments) at 10% per annum (5% per period since payments are semi-annual), and for the remaining 5 years (10 payments) at 6% per annum (3% per period). The present value (PV) of the payments during the first 3 years is calculated using the 10% interest rate, and the PV of the payments for the remaining 5 years is discounted back to the beginning using the 6% rate. The total loan amount is the sum of these two present values.

A Loan Is to Be Repaid with Semi-Annual Payments of $2000