Question

Using technology, determine the semi-annual payment on a 3 year loan of $8,561 at 9.1% compounded semi-annually. Round your answer to the nearest cent.

Answer 1

The semi-annual payment on a 3 year loan of $8,561 at 9.1% compounded semi-annually is $1,662.47.

Answer 2

The semi-annual payment is $1662.47

Explanation:

Given : A 3 year loan of $8,561 at 9.1% compounded semi-annually.

We have to determine the semi annual payment.

We know,

`P=(PV\cdot r)/(1-(1+r)^(-n))`

Where PV is present value of loan.

r is rate of interest

n is time period.

Given loan is calculated semi annually,

So PV = $ 8561

r = 9.1% =
`(9.1)/(200)`

and time period is 3 years = 6 number of period as semi annually.

Thus, Substitute,

We get,

`P=(8561\cdot\left((9.1)/(200)\right))/(1-\left(1+(9.1)/(200)\right)^(-6))`

`P=1662.47`

Thus, the semi-annual payment is $1662.47