Revision as of 10:31, 22 November 2023 by Admin (Created page with "Michelle takes out a loan. It must be repaid with level annual payments based on an annual coupon rate of 4%. The 6th payment consists of $960 in interest and $340 of principal. Calculate the amount of interest paid in the 14th payment. <ul class="mw-excansopts"><li>465.31</li><li>711.23</li><li>588.77</li><li>13.83</li><li>834.69</li></ul> {{cite web |url=https://digitalcommons.calpoly.edu/cgi/viewcontent.cgi?article=1008&context=statsp |last=Hardiek |first=Aaron |...")
ABy Admin
Nov 22'23
Exercise
Michelle takes out a loan. It must be repaid with level annual payments based on an annual coupon rate of 4%. The 6th payment consists of $960 in interest and $340 of principal.
Calculate the amount of interest paid in the 14th payment.
- 465.31
- 711.23
- 588.77
- 13.83
- 834.69
Hardiek, Aaron (June 2010). "Study Questions for Actuarial Exam 2/FM". digitalcommons.calpoly.edu. Retrieved November 20, 2023.
ABy Admin
Nov 22'23
Solution: E
Payment= 960 +340=1300
Principal repaid grows by 1.04 with every payment.
Principal in 14th payment is:
340(1.04)8= 465.31
Interest Paid:
1300 – 465.31= 834.69
Hardiek, Aaron (June 2010). "Study Questions for Actuarial Exam 2/FM". digitalcommons.calpoly.edu. Retrieved November 20, 2023.