A $5000 short-term loan was received on December 3 rd 2018. This loan is scheduled to be repaid as nine uniform weekly payments. A grace period is granted for 5 weeks during which no repayments are required. The first repayment took place on January 7th and should go on for 8 more weekly payments. a] Create a cash flow diagram of the loan showing both the money received as loan and, in symbols, money paid back to the lender (R/week). b] What is the weekly payment if the contract says that the nominal interest rate on this loan is 30% compounded daily? In this part, please make the assumption that the 5 week grace period is interest-free. That is, the value of time during the grace period is zero. Starting from January 7th time value of money follows the contract. c] How much would the weekly payment be had the grace period not been interest free? That is, imagine now that time value of money follows the contract from December 3
A $5000 short-term loan was received on December 3 rd 2018. This loan is scheduled to be repaid as nine uniform weekly payments. A grace period is granted for 5 weeks during which no repayments are required. The first repayment took place on January 7th and should go on for 8 more weekly payments. a] Create a cash flow diagram of the loan showing both the money received as loan and, in symbols, money paid back to the lender (R/week). b] What is the weekly payment if the contract says that the nominal interest rate on this loan is 30% compounded daily? In this part, please make the assumption that the 5 week grace period is interest-free. That is, the value of time during the grace period is zero. Starting from January 7th
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 5 images
