Question 961374
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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.
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        I don't know why @mananth treats the loan re-payments as a compound interest formula for cumulative ordinary annuity.

        It is  NEVER  treated in Finance that way.

        Usually, the loan re-payment problems are treated in totally different way.



<pre>
Use the standard loan formula for semiannually payments

   PMT = {{{P*(r/(1-(1+r)^(-n)))}}}


where L is the loan amount; r = {{{0.08/2}}} = 0.04is the effective semi-annual interest rate;
n is the number of payments (2*9 = 18 in this problem); PMT is the semi-annual payment.


In this problem  P = $12000.


Substitute these values into the formula and get for monthly payment

    PMT = {{{12000*(((0.08/2))/(1-(1+0.08/2)^(-18)))}}} = {{{12000*(0.04/(1-(1.04)^(-18)))}}} = $947.92.


Thus the semi-annual payment is $947.92.


In total, Kill Wong will pay  2*9*947.92 = 17062.56 dollars in 9 years.     <U>ANSWER</U>
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Solved.