A loan of £97,550 is repayable by an annuity payable annually in arrears for 17 years. After the first repayment instalment, subsequent repayment instalments are to be increased by £300 each year. The repayment instalments were calculated using a rate of interest of 5.3% per annum effective. (i) Calculate, to 2 decimal places, the amount of the first repayment instalment: (ii) Calculate, to 2 decimal places, the loan outstanding after the first 10 payments: £ (iii) Immediately after the 10th repayment instalment, the interest rate on the outstanding loan is increased to 6.7% per annum effective and future instalments are kept level, equal to the instalment amount paid at the end of the 10th year. (a) Calculate the adjusted remaining term of the new loan (in whole years): (b) Calculate, to 2 decimal places, the amount of repayment (X) made in the final year: £
A loan of £97,550 is repayable by an annuity payable annually in arrears for 17 years. After the first repayment instalment, subsequent repayment instalments are to be increased by £300 each year. The repayment instalments were calculated using a rate of interest of 5.3% per annum effective. (i) Calculate, to 2 decimal places, the amount of the first repayment instalment: (ii) Calculate, to 2 decimal places, the loan outstanding after the first 10 payments: £ (iii) Immediately after the 10th repayment instalment, the interest rate on the outstanding loan is increased to 6.7% per annum effective and future instalments are kept level, equal to the instalment amount paid at the end of the 10th year. (a) Calculate the adjusted remaining term of the new loan (in whole years): (b) Calculate, to 2 decimal places, the amount of repayment (X) made in the final year: £
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A loan of £97,550 is repayable by an annuity payable annually in arrears for 17 years. After the first repayment instalment,
subsequent repayment instalments are to be increased by £300 each year. The repayment instalments were calculated using a
rate of interest of 5.3% per annum effective.
(i) Calculate, to 2 decimal places, the amount of the first repayment instalment:
(ii) Calculate, to 2 decimal places, the loan outstanding after the first 10 payments: £
(iii) Immediately after the 10th repayment instalment, the interest rate on the outstanding loan is increased to 6.7% per annum
effective and future instalments are kept level, equal to the instalment amount paid at the end of the 10th year.
(a) Calculate the adjusted remaining term of the new loan (in whole years):
(b) Calculate, to 2 decimal places, the amount of repayment (X) made in the final year: £
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