Asked by Blake French on May 27, 2024
Verified
A loan of $20,000 is to be repaid by equal semi-annual payments over three years at 7.5% compounded semi-annually. Construct an amortization schedule for the loan. How much interest is paid in total?
Compounded Semi-annually
An interest calculation method where interest is added to the principal balance of an investment or loan twice a year, resulting in interest on interest.
Amortization Schedule
A detailed table showing the periodic payments on a loan, with each payment allocated between interest and principal repayment.
- Create and decipher amortization timetables.
- Examine how alterations in interest rates affect monthly remittances and the sum of interest paid over time.
Verified Answer
JB
Learning Objectives
- Create and decipher amortization timetables.
- Examine how alterations in interest rates affect monthly remittances and the sum of interest paid over time.