Asked by Margie Hammon on May 12, 2024

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A property development company obtained a $2.5 million loan to construct a commercial building. The interest rate on the loan is 5% compounded semi-annually. The lender granted a period of deferral until rental revenues become established. The first quarterly payment of $100,000 is required 21 months after the date of the loan. How long after the date of the original loan will the last payment be made?

Deferral Period

A specified period of time during which payment of a debt, investment, or loan is suspended or delayed.

  • Acquire knowledge on the topic of loan amortization and compute the period and payment amounts for loans undergoing amortization.
  • Acquire insight into how the frequency of compounding affects investment development.
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Sepehr KarimiMay 16, 2024
Final Answer :
9.75 years or 9 years, 9 months after the original loan