Answers
Semi-annual Loan Payment
Loan Amount (P) = $145,750 [$182,188 x 80%]
Semi-annual Interest Rate (n) = 3% [6% x ½]
Number of period (n) = 6 Periods [3 Years x 2]
Semi-annual Loan Payment = P x {r (1+r)^{n}} ] / [( 1+r)^{n} – 1]
= [$145,750 x {0.03 x (1 + 0.03)^{6}}] / [(1 + 0.03)^{3} – 1]
= [$145,750 x {0.03 x 1.194052}] / [1.194052 – 1]
= [$145,750 x 0.035821] / 0.194052
= $5,220.99 / 0.194052
= $26,905 per each semi-annual period
Loan Amortization Table
Payment | Beginning Amount | Payment | Interest Paid at 3% | Repayment of Principal | Ending Balance |
1 | $1,45,750 | $26,905 | $4,373 | $22,533 | $1,23,218 |
2 | $1,23,218 | $26,905 | $3,697 | $23,208 | $1,00,009 |
3 | $1,00,009 | $26,905 | $3,000 | $23,905 | $76,104 |
4 | $76,104 | $26,905 | $2,283 | $24,622 | $51,482 |
5 | $51,482 | $26,905 | $1,544 | $25,361 | $26,122 |
6 | $26,122 | $26,905 | $783 | $26,122 | $0 |
TOTAL | $1,61,430 | $15,680 | $1,45,750 | $0 | |
Interest payment is calculated at 3% on the beginning balance of the loan.
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