Mr Banda is struggling to repay his loan of K400,000 with payments of K7,200 made monthly in arrears for 6 years. (a) Calculate the flat rate of interest per annum. (2) (b) Hence, or otherwise, calculate the APR of Mr Banda’s loan. (3) After exactly one year, a loan company offers to “help” Mr Banda by restructuring his loan with new monthly payments of K4,000 made in arrears. (c) AssumingthecompanychargesthesameAPRasMrBanda’soriginalloan,calculate the term of the new loan. (4) (d) Calculate how much more interest in total Mr Banda will pay on his restructured loan than on his original loan
Mr Banda is struggling to repay his loan of K400,000 with payments of K7,200 made monthly in arrears for 6 years. (a) Calculate the flat rate of interest per annum. (2) (b) Hence, or otherwise, calculate the APR of Mr Banda’s loan. (3) After exactly one year, a loan company offers to “help” Mr Banda by restructuring his loan with new monthly payments of K4,000 made in arrears. (c) AssumingthecompanychargesthesameAPRasMrBanda’soriginalloan,calculate the term of the new loan. (4) (d) Calculate how much more interest in total Mr Banda will pay on his restructured loan than on his original loan
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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. Mr Banda is struggling to repay his loan of K400,000 with payments of K7,200 made
monthly in arrears for 6 years.
(a) Calculate the flat rate of interest per annum. (2)
(b) Hence, or otherwise, calculate the APR of Mr Banda’s loan. (3) After exactly one year, a loan company offers to “help” Mr Banda by restructuring his
loan with new monthly payments of K4,000 made in arrears.
(c) AssumingthecompanychargesthesameAPRasMrBanda’soriginalloan,calculate
the term of the new loan. (4) (d) Calculate how much more interest in total Mr Banda will pay on his restructured
loan than on his original loan.
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