A Debt of $8,800 Is to Be Amortized with 8

question 81

Multiple Choice

A debt of $8,800 is to be amortized with 8 equal semiannual payments of $1,417.12. If the annual interest rate is 12% compounded semiannually, find the unpaid balance immediately after the 5th payment. Round your answer to the nearest cent. ​

• A)$227.28
• B)$3,787.98
• C)$140,155.21
• D)$6,968.44
• E)$9,638.81

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Definitions:

Useful Life

The estimated duration an asset is expected to be functional and economically useful for its intended purpose.

Residual Value

The anticipated worth of an asset at the conclusion of its lifespan, once depreciation has been accounted for.

Useful Life

The estimated period over which a fixed asset is expected to be useful for the purpose it was acquired by a company.

Net Present Values

A method used in capital budgeting to evaluate the profitability of an investment, calculated by subtracting the initial investment from the present value of future cash flows.