6. (5 Marks) A debt of $2000 plus interest at 10% compounded semi-annually is due at...

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6. (5 Marks) A debt of $2000 plus interest at 10% compounded semi-annually is due at the end of 6 years. If $300 is paid at the end of one year, what two equal payments, one at the end of year 2 and one at the end of year 4 will satisfy the original debt. The interest rate is now 6% compounded quarterly. Use 4 years as the focal date. 6. (5 Marks) A debt of $2000 plus interest at 10% compounded semi-annually is due at the end of 6 years. If $300 is paid at the end of one year, what two equal payments, one at the end of year 2 and one at the end of year 4 will satisfy the original debt. The interest rate is now 6% compounded quarterly. Use 4 years as the focal date.

Answer rating: 100% (QA)

To solve this problem we need to break it down into steps Step 1 Calculate the future value of the d... View the full answer