Question

A design studio received a loan of $7,250 at 3.30% compounded semi-annually to purchase a camera. If they settled the loan in 3 years by making quarterly payments, construct the amortization schedule for the loan and answer the following questions:

**a.** What was the payment size?

Round to the nearest cent

**b.** What was the size of the interest portion on
the first payment?

Round to the nearest cent

**c.** What was the balance of the loan at end of
the first year?

Round to the nearest cent

**d.** What was the size of the interest portion on
the last payment?

Round to the nearest cent

Answer #1

1.

612.26

2.

14.89

3.

4853.14

4.

1.26

Below is the amortization schedule

Payment | Loan beginning balance | Payment | Interest payment | Principal payment | Loan ending balance |

1 | 7250 | $612.26 | $14.89 | $597.37 | $6,652.63 |

2 | $6,652.63 | $612.26 | $13.66 | $598.60 | $6,054.03 |

3 | $6,054.03 | $612.26 | $12.44 | $599.83 | $5,454.20 |

4 | $5,454.20 | $612.26 | $11.20 | $601.06 | $4,853.14 |

5 | $4,853.14 | $612.26 | $9.97 | $602.29 | $4,250.85 |

6 | $4,250.85 | $612.26 | $8.73 | $603.53 | $3,647.31 |

7 | $3,647.31 | $612.26 | $7.49 | $604.77 | $3,042.54 |

8 | $3,042.54 | $612.26 | $6.25 | $606.01 | $2,436.53 |

9 | $2,436.53 | $612.26 | $5.00 | $607.26 | $1,829.27 |

10 | $1,829.27 | $612.26 | $3.76 | $608.51 | $1,220.76 |

11 | $1,220.76 | $612.26 | $2.51 | $609.76 | $611.01 |

12 | $611.01 | $612.26 | $1.26 | $611.01 | $0.00 |

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