A $15,000 debt is to be amortized in 12 equal semiannual payments at an annual interest rate of 11% on the unpaid balance. Construct an amortization table to determine the unpaid balance after two payments have been made.

solution

The interest rate per period is r = 0.11/2 = 0.055

then There are n = 12 payments total and you're borrowing

soL = 15000 dollars

when we Plug all of this into the formula below P = L(r(1 + r)^12)/((1 + r)^12 - 1)

P = 15000(0.055(1 + 0.055)^12)/((1 + 0.055)^12 - 1)

which shows P = 1740.43846787421 P = 1740.44

So that's the monthly payment

Secure Information

Content will be erased after question is completed.

Enter the email address associated with your account, and we will email you a link to reset your password.

Forgot your password?

Sign Up