Question

To prepare an amortization schedule for a loan that is repaid by semiannual payments, to calculate the payment amount, interest, principal repayment, and the remaining loan balance for each payment period.

Given information:
Loan amount (principal), P = $10,400
Annual interest rate, r = 11%
Compounded semiannually (twice a year)

Answer 1

To calculate the monthly payments for a loan repaid by semiannual payments, use the formula: Payment = (P * r) / (1 - (1 + r)^(-n)).

Step-by-step explanation:

To calculate the monthly payments for a loan repaid by semiannual payments, you can use the formula:

Payment = (P * r) / (1 - (1 + r)^(-n))

Where P is the loan amount, r is the interest rate per period, and n is the number of payment periods. In this case, the loan amount (principal) is $10,400, the interest rate per period is 11% / 2 = 5.5%, and the number of payment periods is 2 times the number of years.

Using these values, you can calculate the monthly payment amount, interest, principal repayment, and remaining loan balance for each payment period in the amortization schedule.