A loan of $$250,000$ is taken out at an effective rate of interest of $7\mathrm{.}5\%$ per annum,

level loan repayments are made semi$-$annually in arrears such that the loan will

be fully repaid $8$ years after it is taken out. If repayments are insufficient to cover

the interest due, then the loan will be increased to cover the shortfall.

All amounts are in $

$2)$ All amounts are rounded of to near cents

$3)$ Interest Rate $=8\mathrm{.}75\%$

$4)$ Interest is compounded semi annually

Step $2$

To create an amortization schedule for a loan, we can use the loan amortization formula. The formula is:

P$=$

where: P $=$ r$.$PV$/1-(1+$r$)^-$n