Find the total interest paid over the life of the loan

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Question - A company wants to have $30,000 at the beginning of each 6-month period for the next 4 1 2 years. If an annuity is set up for this purpose, how much must be invested now if the annuity earns 6.66%, compounded semiannually?

(a) Decide whether the problem relates to an ordinary annuity or an annuity due.

(b) Solve the problem. (Round your answer to the nearest cent.)

The problem describes a debt to be amortized. (Round your answers to the nearest cent.) Sean Lee purchases $30,000 worth of supplies for his restaurant by making a $4,000 down payment and amortizing the remaining cost with quarterly payments over the next 7 years. The interest rate on the debt is 16% compounded quarterly.

(a) Find the size of each payment.

(b) Find the total amount paid for the purchase.

(c) Find the total interest paid over the life of the loan.

Reference no: EM133029545

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