document.write( "Question 961374: Kyle Wong loans $12,000 to his brother-in-law. He will be repaid at the end of 9 years with interest at 8% compounded semiannually. Find out how much will be repaid. \n" ); document.write( "
Algebra.Com's Answer #853466 by ikleyn(53570)\"\" \"About 
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\n" ); document.write( "Kyle Wong loans $12,000 to his brother-in-law. He will be repaid at the end of 9 years
\n" ); document.write( "with interest at 8% compounded semiannually. Find out how much will be repaid.
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\n" ); document.write( "\n" ); document.write( "        I don't know why @mananth treats the loan re-payments as a compound interest formula for cumulative ordinary annuity.\r
\n" ); document.write( "\n" ); document.write( "        It is  NEVER  treated in Finance that way.\r
\n" ); document.write( "\n" ); document.write( "        Usually, the loan re-payment problems are treated in totally different way.\r
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document.write( "Use the standard loan formula for semiannually payments\r\n" );
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document.write( "   PMT = \"P%2A%28r%2F%281-%281%2Br%29%5E%28-n%29%29%29\"\r\n" );
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document.write( "where L is the loan amount; r = \"0.08%2F2\" = 0.04is the effective semi-annual interest rate;\r\n" );
document.write( "n is the number of payments (2*9 = 18 in this problem); PMT is the semi-annual payment.\r\n" );
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document.write( "In this problem  P = $12000.\r\n" );
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document.write( "Substitute these values into the formula and get for monthly payment\r\n" );
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document.write( "    PMT = \"12000%2A%28%28%280.08%2F2%29%29%2F%281-%281%2B0.08%2F2%29%5E%28-18%29%29%29\" = \"12000%2A%280.04%2F%281-%281.04%29%5E%28-18%29%29%29\" = $947.92.\r\n" );
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document.write( "Thus the semi-annual payment is $947.92.\r\n" );
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document.write( "In total, Kill Wong will pay  2*9*947.92 = 17062.56 dollars in 9 years.     ANSWER\r\n" );
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