Annuity Payments and Amortization Schedule Consider Carrie Asks Miranda to Help

Annuity Payments and Amortization Schedule Consider Carrie asks Miranda to help with her 20% down payment on her apartment. Miranda is willing to loan Carrie $30,000, but she is requiring 6.5% interest and semi-annual payments over three years to repay the loan. Carrie wants to deduct the loan's interest from her taxes, and Miranda must show the interest income on her taxes, so they need to know how much interest is included each year in the payments. Compute the semi-annual payments and create an amortization schedule to determine the interest paid each year.

Correct Answer:

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N = 3 * 2 = 6
I = 6.5/2 = 3.25
PV = 3000...

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