You borrowed $304,000.00 to buy your first home. The interest rate is 4% compounded quarterly, and you will be making the payment twice a month. If the amortization is 20 years, find the values for the letters A ∼ J.
payment number 0, 1, f
payment amount b, g
interest c, h
principal d, i
balance a, e, j
Looking at the question, the obvious missing part is the twice monthly payment.
The standard annuity formula only works if the interest period and the payment period are the same, here they are not.
So we have to convert the 4% compounded quarterly into a rate compounded twice a month
Let that rate be i
(1 + .04/4)^4 = (1+i)^24
take the 4th root
1.01 = (1+i)^6
now take the 6th root
1+i = 1.01^(1/6) = 1.0016597...
i = .0016597... (I stored in my calculator' memory)
304000 = paym(1 - 1.0016597..^-480)/.0016597..)
I get paym = 919.27 <----- twice monthly payment
take over to answer all that a, b, c, stuff