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majarm majarm
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7 years ago
A debt of $10 000.00 with interest at 8% compounded quarterly is to be repaid by equal payments at the end of every three months for two years.
a) Calculate the size of the monthly payments.
b) Construct an amortization table.
c) Calculate the outstanding balance after three payments.
Textbook 
Contemporary Business Mathematics with Canadian Applications

Contemporary Business Mathematics with Canadian Applications


Edition: 11th
Authors:
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#1
7 years ago
a)    PV = 10 000.00; n = 2(4) = 8; i =   = 2% = 0.02; I/Y = 8; P/Y = C/Y = 4;
   10000 = PMT 
   10000 = PMT[7.32548144]
   PMT = 
   PMT = $1365.10

Programmed solution:
 
b)
Amortization Table (done using Excel):


c)    PMT = 1365.10; n = 5(number of payments left); i = 0.02
   PV = 1365.10  = $6434.34

Programmed solution:

The difference from the chart is due to rounding.
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