Final answer:
The payment necessary to amortize a 4% loan of $700 compounded quarterly, with 10 quarterly payments, is $68.70 (rounded to the nearest cent).
Step-by-step explanation:
To amortize a loan, we need to find the monthly payment. The formula to calculate the monthly payment for an amortizing loan is:
Monthly Payment = Principal * (Rate / (1 - (1 + Rate) ^ -n))
In this case, the principal is $700, the interest rate is 4% (0.04), and the loan is compounded quarterly with 10 quarterly payments. The formula becomes:
Monthly Payment = 700 * (0.04 / (1 - (1 + 0.04) ^ -10))
Calculating the value gives us a monthly payment of $68.70. Therefore, the payment necessary to amortize the loan is $68.70 (rounded to the nearest cent).