The interest rate on a $14,600 loan is 10.0% compounded semiannually. Semiannual payments will pay off the loan in seven years. (Do not round Intermedlate calculations. Round the PMT and final answers to 2 declmal places.) a. Calculate the interest component of Payment 10. Interest 24 b. Calculate the principal component of Payment 7. Principal c. Calculate the interest paid in Year 6. Interest paid d. How much do Payments 7 to 10 inclusive reduce the principal balance? Principal reduction

The interest rate on a $14,600 loan is 10.0% compounded semiannually. Semiannual payments will pay off the loan in seven years. (Do not round Intermedlate calculations. Round the PMT and final answers to 2 declmal places.) a. Calculate the interest component of Payment 10. Interest 24 b. Calculate the principal component of Payment 7. Principal c. Calculate the interest paid in Year 6. Interest paid d. How much do Payments 7 to 10 inclusive reduce the principal balance? Principal reduction

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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