Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 17P
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Question
(engineering economic )
An investor gets a loan from a bank of Rp. 500 million to fund new ventures to be run. The loan bears 10% compound interest annually with a five-year repayment period. The interest on the loan along with the principal loan is paid at the same time at the end of the loan period. After 3 years, the bank provides an additional loan of Rp. 300 million but increased the interest to 12% annually and changed the interest calculation based on a single interest calculation. Calculate the repayment of this loan at the end of the loan period and describe the cash flow.
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