SOLUTION: In return for a loan, with money worth 7% compounded semiannually, a man promises to pay $600 at the end of each 6 months for 8 years. (a) Find the sum which he borrows.
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Question 1195216: In return for a loan, with money worth 7% compounded semiannually, a man promises to pay $600 at the end of each 6 months for 8 years. (a) Find the sum which he borrows. Answer by Theo(13342) (Show Source):
You can put this solution on YOUR website! i used the arachnoid financial calculator at https://arachnoid.com/finance/
here is a display of the results.
inputs were everything except pv.
output was pv (present value).
that's the amount of the loan which is equal to 7,256.47.
the number of time periods is 8 years * 2 semi-annual periods per year = 16 semi-annual time periods.
the interest rate per time period is 7% per year / 2 semi-annual periods per year = 3.5% per semi-annual time period.
let me know if you have any questions.
theo
