Question

Calculate the number of payments and the number of interest periods for each of the following:...

Calculate the number of payments and the number of interest periods for each of the following:

a. First payment on January 1, 2015 and last payment on March 1, 2018 if payments are made monthly.

b. First payment on July 18, 2007 and last payment on January 18, 2018 if payments are made every 6 months.

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Answer #2

a, First payment-1st January 2015 and last is March 1,3018.

Number of payments=38 and so there are 38 interest periods.

Since there are 12 months in 2015,2016,2017 and in 2018 there are only two months till last payment.

a. 1st payment-July 18,2007 and last payment-Janaury 18,2018.

Number of months=126 and payment is every 6 months.

Since there are 12 months each year from 2007 July to 2017 July that is 10*12=120 monthsand till January 18,2018 there are 6 more months.

So, number of payments=126/6=21 that is 21 interest periods.

answered by: anonymous
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