The interest rate on a $14,700 loan is 9.1% compounded semiannually. Semiannual payments will pay off the loan in eight years. (Donot round intermediate calculations. Round the PMT and final answers to 2 decimal places.)a. Calculate the interest component of Payment 11.Interest$b. Calculate the principal component of Payment 3.Principal$c. Calculate the interest paid in Year 7.Interest paid$d. How much do Payments 3 to 6 inclusive reduce the principal balance?Principal reduction$

Answered: The interest rate on a $14,700 loan is…

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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A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an annual interest rate of 11%. If 6 months have passed since note establishment, what would be the recorded interest figure at that time? A. $7,150 B. $65,000 C. $14,300 D. $2,383
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