What amortization payment would be required every six months at 14% interest to pay off a loan that is $35,000 with in four years. answer needs to be rounded to the nearest cent.
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$5,861.37
you have taken an amortized loan at 7.5% for 4 years to pay off your new car, which cost $15,000. after 3 years, you have decide to pay off the loan. find the unpaid balance. assume monthly payments
small business loan for 50,000 dollars.interest rate 9% for 6 years. what is the unpaid balance at the end of the 6th year? show the formula used, and the values for each variable to calculate the unpaid balance at the end of the 6th year
To calculate the amortization payment required every six months, we can use the formula for calculating the amortization payment for a loan:
A = (P * r * (1 + r)^n) / ((1 + r)^n - 1)
Where:
A = Amortization payment
P = Principal amount (loan amount)
r = Interest rate per period
n = Total number of periods
In this case, the loan amount is $35,000, the interest rate is 14% per year, and the loan term is 4 years, which means there are 8 six-month periods.
First, we need to convert the annual interest rate to a six-month rate by dividing it by 2: 14% / 2 = 7%. Then, convert it to a decimal by dividing by 100: 7% / 100 = 0.07.
Next, calculate the number of periods: 4 years × 2 = 8 six-month periods.
Using these values in the formula, the calculation becomes:
A = (35,000 * 0.07 * (1 + 0.07)^8) / ((1 + 0.07)^8 - 1)
Now we can calculate the amortization payment:
A = (35,000 * 0.07 * 1.663678864) / (1.663678864 - 1)
A = (4,374.76) / (0.663678864)
A = $6,593.04
Therefore, the amortization payment required every six months would be $6,593.04.