Question

A group of private investors purchased a condominium complex for $2 million. They made an initial down payment of 10% and obtained financing for the balance. If the loan is to be amortized over 15 years at an interest rate of 8.1%/year compounded quarterly, find the required quarterly payment.

Answer 1

Answer:

The required quarterly payment is $52,096

Explanation:

According to the given data we have the following:

Principal=$2,000,000×0.90=$1,800,000

I=8.1%/4=2.025%

N=15×4=60

Therefore, in order to calculate the required quarterly payment we would have to use the following formula:

quarterly payment=$1,800,000×2.025%

                                 1-(1+2.025%)∧-60

                              =$52,096