3. A loan of $36,550.00 at 5.00% compounded semi-annually is to be repaid with payments at the end of every 6 months. The loan was settled in 5 years.
a. Calculate the size of the periodic payment. Round to the nearest cent.
b. Calculate the total interest paid. Round to the nearest cent.
a)
Interest rate =5%
Semi-annual interest rates
Payment period =5 years =10 semi-annual
Present value FACTOR
Present value FACTOR
Loan amount =Present value FACTOR x semi-annual payment
semi-annual payment
Semi-annual payment
Total payment = Semi-annual payment x number of payments
Total payment
Total payment
b)
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