Question

A debt of $9000 is to be amortized with 4 equal semiannual payments. If the interest rate is 7%, compounded semiannually, what is the size of each payment?

Answer 1

Instalment = Loan / PVAF (r%, n)

Where r is int rate per six months & n is no. of half years

= $ 9000 / PVAF (5% , 4)

= $ 9000/ 3.5460

= $ 2538.11

Pls comment, if any further assistance is required.

Explanation: