Asked by Jacquelyn Marie on Apr 29, 2024
Verified
What semi-annual payment would be required to pay off a loan of $5,000 at 8.5% compounded semi-annually over five years?
Semi-annually Compounded
A method of calculating interest where the interest is added to the principal amount twice a year, leading to growth at an exponential rate.
Semi-annual Payment
A payment made twice a year, often related to loans or investments requiring interest payments or installments.
Loan
Funds lent out that are anticipated to be returned along with an additional charge for usage, known as interest.
- Comprehend the methodology for computing the return rate on different financial instruments and credits.
- Examine the effect that frequency of compounding has on the profitability of investments and the financial charges of borrowing.
Verified Answer
KC
Learning Objectives
- Comprehend the methodology for computing the return rate on different financial instruments and credits.
- Examine the effect that frequency of compounding has on the profitability of investments and the financial charges of borrowing.