Asked by DYLAN HOLLOWAY on Jun 05, 2024
Verified
A personal loan of $15,000 is to be repaid over four years at 7.75% compounded semi-annually. What is the amount of the monthly payment?
Compounded Semi-annually
An interest calculation method where interest is added to the principal sum twice a year, affecting the total interest earned.
Monthly Payment
The fixed amount of money paid every month over the course of a loan term or to settle a recurring charge.
Personal Loan
An unsecured loan provided by financial institutions based on the borrower's credit history and income.
- Apprehend the core principles of compound interest and how they are utilized in the calculation of payments for loans.
- Appraise the installment sizes for mortgages or savings influenced by differing interest rates and compounding cycles.
- Implement financial models to calculate the overall interest expenditure during the life of a loan.
Verified Answer
ZK
Learning Objectives
- Apprehend the core principles of compound interest and how they are utilized in the calculation of payments for loans.
- Appraise the installment sizes for mortgages or savings influenced by differing interest rates and compounding cycles.
- Implement financial models to calculate the overall interest expenditure during the life of a loan.