A loan of £4,000 is to be repaid over 5 years by a level annuity payable monthly in arrears. The amount of the monthly payment is calculated on the basis of an interest rate of 1% per month effective. Find the total capital repaid and interest paid in the first and last month, respectively. Answer: The interest paid in the first month is a) £4000x1.01= £4040 b) £4000x(1-exp(-0.01))=£39.807 c)£4000x0.01= £40 d)£4000x0.12= £480 The repaid capital is a)£0.535 b)£48.9778 c)£49.1771 d)£587.734 In the last month, the interest paid is a)£ 0.00535 b)£0.489778 c) £0.889778 d)0.491771 In the last month, the capital repaid is a)£479.645 b)£431.358 c)£88.088 d)39.8007 They are multiple-choice questions
A loan of £4,000 is to be repaid over 5 years by a level annuity payable monthly in arrears. The amount of the monthly payment is calculated on the basis of an interest rate of 1% per month effective. Find the total capital repaid and interest paid in the first and last month, respectively. Answer: The interest paid in the first month is a) £4000x1.01= £4040 b) £4000x(1-exp(-0.01))=£39.807 c)£4000x0.01= £40 d)£4000x0.12= £480 The repaid capital is a)£0.535 b)£48.9778 c)£49.1771 d)£587.734 In the last month, the interest paid is a)£ 0.00535 b)£0.489778 c) £0.889778 d)0.491771 In the last month, the capital repaid is a)£479.645 b)£431.358 c)£88.088 d)39.8007 They are multiple-choice questions
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
A loan of £4,000 is to be repaid over 5 years by a level annuity payable monthly in arrears. The amount of the monthly payment is calculated on the basis of an interest rate of 1% per month effective.
Find the total capital repaid and interest paid in the first and last month, respectively.
Answer: The interest paid in the first month is
a) £4000x1.01= £4040
b) £4000x(1-exp(-0.01))=£39.807
c)£4000x0.01= £40
d)£4000x0.12= £480
The repaid capital is
a)£0.535
b)£48.9778
c)£49.1771
d)£587.734
In the last month, the interest paid is
a)£ 0.00535
b)£0.489778
c) £0.889778
d)0.491771
In the last month, the capital repaid is
a)£479.645
b)£431.358
c)£88.088
d)39.8007
They are multiple-choice questions
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