Question

Using technology, determine the semi-annual payment on a 3 year loan of $8,561 at 9.1% compounded semi-annually. Round your answer to the nearest cent.

Answer 1

The semi-annual payment on a 3 year loan of $8,561 at 9.1% compounded semi-annually is $1,662.47.

Answer 2

Answer:

The semi-annual payment is $1662.47

Step-by-step explanation:

Given : A 3 year loan of $8,561 at 9.1% compounded semi-annually.

We have to determine the semi annual payment.

We know,

$P=\frac{PV\cdot r}{1-(1+r)^{-n}}$

Where PV is present value of loan.

r is rate of interest

n is time period.

Given loan is calculated semi annually,

So PV = $ 8561

r = 9.1% = $\frac{9.1}{200}$

and time period is 3 years = 6 number of period as semi annually.

Thus, Substitute,

We get,

$P=\frac{8561\cdot\left(\frac{9.1}{200}\right)}{1-\left(1+\frac{9.1}{200}\right)^{-6}}$

$P=1662.47$

Thus, the semi-annual payment is $1662.47