Calculate the size of each semi-annual payment

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Question: A debt of $18,000 is being repaid by 15 equal semi-annual payments. Payments are made atthe end of every six months, with the first payment to be made six months from now. Interestis at the rate of 7% compounded semi-annually.

a) Calculate the size of each semi-annual payment.

b) Calculate the loan outstanding amount after the first 2 years.

c) After the first two years, the interest rate increases to 8% p.a. compounded semi-annually. If the debt must be paid off on the original agreed-on term, recalculate thesize of the new semi-annual payments.

d) If the first payment is to be made a year from now, recalculate the size of each semi-annual payment.

e) If payments are to be made at the beginning of every six months, with the first paymentdue immediately, recalculate the size of each semi-annual payment.

Reference no: EM133552285

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