Find the Periodic Payment R Required to Amortize a Loan

question 83

Multiple Choice

Find the periodic payment R required to amortize a loan of P dollars over t years with interest earned at the rate of r%/year compounded m times a year. Round your answer to the nearest cent. ​
P = 80,000, r = 9, t = 12, m = 2
​

• A) R = $5,461.61
• B) R = $5,876.44
• C) R = $5,518.96
• D) R = $5,642.49

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Definitions:

Double Declining Balance

An accelerated method of depreciation which doubles the rate at which an asset is depreciated compared to the straight-line method.

Straight Line

A method for calculating depreciation or amortization by equally spreading the cost over the useful life of the asset.

Depreciation Expense

The allocated portion of the cost of a tangible asset over its useful life, intended to account for the decrease in value due to use and age.

Units-Of-Output Method

A depreciation method where the expense is based on the actual usage or production output of the asset.