Question

Determine the payment to amortize the debt. (Round your answer to the nearest cent.) Quarterly payments on $19,500 at 3.9% for 6 years.

Answer 1

$24613.15

Explanation:

Given,

• principal amount, P = $19,500
• rate of interest,r = 3.9%
• Time, t = 6 years

Since, payment is made quarterly,

• n = 4

We have to calculate the total amount to be paid to amortize the debt.

So, the amount to be paid

A\ =\ P(1\ +\dfrac{r}{n})^{nt}

=\ 19500(1\ +\dfrac{0.039}{4})^{4\times 6}

=\ 19500(1+0.00975)^{24}

= 24613.155

So, the total amount to be paid is $24613.15.