A client is given a loan of principal amount of R50,000 which accrues interest of 10% per annum, compounded monthly. The loan is repaid in monthly instalments, with the first instalment of R1,062.35 starting one month after the loan is granted. The client decides that the instalment amount paid after every 6th month, counting from when the loan is granted, must be increased by 5% from the instalment in the previous month. The amounts of all other instalments are equal to the amount of the instalment paid in the directly preceding month. Then, the client will have the loan paid-up in a. 20 months b. 49 months c. None d. 54 months
A client is given a loan of principal amount of R50,000 which accrues interest of 10% per annum, compounded monthly. The loan is repaid in monthly instalments, with the first instalment of R1,062.35 starting one month after the loan is granted. The client decides that the instalment amount paid after every 6th month, counting from when the loan is granted, must be increased by 5% from the instalment in the previous month. The amounts of all other instalments are equal to the amount of the instalment paid in the directly preceding month. Then, the client will have the loan paid-up in a. 20 months b. 49 months c. None d. 54 months
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A client is given a loan of principal amount of R50,000 which accrues interest of 10% per annum, compounded monthly. The loan is repaid in monthly instalments, with the first instalment of R1,062.35 starting one month after the loan is granted. The client decides that the instalment amount paid after every 6th month, counting from when the loan is granted, must be increased by 5% from the instalment in the previous month. The amounts of all other instalments are equal to the amount of the instalment paid in the directly preceding month. Then, the client will have the loan paid-up in
| a. |
20 months |
|
| b. |
49 months |
|
| c. |
None |
|
| d. |
54 months |
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