A debt of $10 000.00 with interest at 8% compounded quarterly is to be repaid by equal payments at the end of every three months for two years.
a) Calculate the size of the monthly payments.
b) Construct an amortization table.
c) Calculate the outstanding balance after three payments.

Question

Quizplus · Accepted Answer

The Answer is a) PV = 10 000.00; n = 2(4) = 8; i =

a) PV = 10 000.00; n = 2(4) = 8; i = = 2% = 0.02; I/Y = 8; P/Y = C/Y = 4; Programmed solution: b) Amortization Table (done using Excel): c) PMT = 1365.10; n = 5(number of payments left); i = 0.02 = $6434.34 Programmed solution: The difference from the chart is due to rounding.

= 2% = 0.02; I/Y = 8; P/Y = C/Y = 4;
a) PV = 10 000.00; n = 2(4) = 8; i = = 2% = 0.02; I/Y = 8; P/Y = C/Y = 4; Programmed solution: b) Amortization Table (done using Excel): c) PMT = 1365.10; n = 5(number of payments left); i = 0.02 = $6434.34 Programmed solution: The difference from the chart is due to rounding.

Programmed solution: a) PV = 10 000.00; n = 2(4) = 8; i = = 2% = 0.02; I/Y = 8; P/Y = C/Y = 4; Programmed solution: b) Amortization Table (done using Excel): c) PMT = 1365.10; n = 5(number of payments left); i = 0.02 = $6434.34 Programmed solution: The difference from the chart is due to rounding.

b)
Amortization Table (done using Excel): a) PV = 10 000.00; n = 2(4) = 8; i = = 2% = 0.02; I/Y = 8; P/Y = C/Y = 4; Programmed solution: b) Amortization Table (done using Excel): c) PMT = 1365.10; n = 5(number of payments left); i = 0.02 = $6434.34 Programmed solution: The difference from the chart is due to rounding.

c) PMT = 1365.10; n = 5(number of payments left); i = 0.02
a) PV = 10 000.00; n = 2(4) = 8; i = = 2% = 0.02; I/Y = 8; P/Y = C/Y = 4; Programmed solution: b) Amortization Table (done using Excel): c) PMT = 1365.10; n = 5(number of payments left); i = 0.02 = $6434.34 Programmed solution: The difference from the chart is due to rounding.

= $6434.34
Programmed solution: a) PV = 10 000.00; n = 2(4) = 8; i = = 2% = 0.02; I/Y = 8; P/Y = C/Y = 4; Programmed solution: b) Amortization Table (done using Excel): c) PMT = 1365.10; n = 5(number of payments left); i = 0.02 = $6434.34 Programmed solution: The difference from the chart is due to rounding.

The difference from the chart is due to rounding.

A Debt of $10 000