Courtney received a loan of $8,500 at 3.52% compounded semi-annually from a credit union to use as working capital for his business. He had to make semi-annual payments for a period of 4 years to settle the loan.

a. Calculate the size of his payments.

b. What was the total interest paid during the period?

c. What was the interest portion of payment number 3?

Business Mathematics Formulas (Vretta Text) Simple Interest I = Prt Compound Interest i=1 m FV = PV(1+i)" m f=(1+i) -1 Annuities FV = PMT i=(1+i) -1 FV = PMT Due PV (1+i)" Perp Bonds PMT i 1+i)" . i Jo+ Bond price = b(FV) +i) Pr[1=(1+5)* i -n S = P(1+rt) n=mxt PV = FV (1+i)" i = (1+i) -1 PV = PMT PV 1(1+i) i Number of compounding periods per year Number of payments per year PV = PMT Due Perp Due + FV (1+i)" [1= -n (1 + i) i PMT (1+i) -n (1 + i)