Question

Stanley borrows $300,000 to be paid off in three years. The loan payments are semiannual with the first payment due in six months, and interest is at 6%. What is the amount of each payment

Answer 1

The amount of each payment that Stanley should make is $61,008.79.

Step-by-step explanation:

Stanley should repay $61,008.79 semi-annually to reach the future value of $0.00 or pay off the $300,000 he borrows for three years.

This is calculated, using an online finance calculator, as follows:

FV (Future Value) $0.00

PV (Present Value) $0.00

N (Number of Periods) 6.000 (2 * 3 years)

I/Y (Interest Rate) 6.000%

PMT (Periodic Payment) $-61,008.79

Starting Investment $300,000.00

Total Interest $66,052.74