On 1/1/2017, a loan of RM80,000 was taken and has to be repaid in level payment at the end of each month for 10 years. (i) Calculate the level monthly payment using an effective rate of interest of 8% per annum.On 1/11/2019, immediately after the payment, the monthly payment is reduced to RM910 and the remaining term is extended to clear the outstanding loan balance. The final smaller payment is to be paid one month after the last regular monthly payment. In addition, a service charge of RM955 is added to the loan outstanding on 1/11/ 2019 and the interest rate applied in future is increased to 9% per annum convertible monthly. (ii) Determine the new date on which the loan will be repaid.
On 1/1/2017, a loan of RM80,000 was taken and has to be repaid in level payment at the end of each month for 10 years. (i) Calculate the level monthly payment using an effective rate of interest of 8% per annum.On 1/11/2019, immediately after the payment, the monthly payment is reduced to RM910 and the remaining term is extended to clear the outstanding loan balance. The final smaller payment is to be paid one month after the last regular monthly payment. In addition, a service charge of RM955 is added to the loan outstanding on 1/11/ 2019 and the interest rate applied in future is increased to 9% per annum convertible monthly. (ii) Determine the new date on which the loan will be repaid.
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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On 1/1/2017, a loan of RM80,000 was taken and has to be repaid in level payment at the end of each month for 10 years.
(i) Calculate the level monthly payment using an effective rate of interest of 8% per annum.On 1/11/2019, immediately after the payment, the monthly payment is reduced to RM910 and the remaining term is extended to clear the outstanding loan balance. The final smaller payment is to be paid one month after the last regular monthly payment. In addition, a service charge of RM955 is added to the loan outstanding on 1/11/ 2019 and the interest rate applied in future is increased to 9% per annum convertible monthly.
(ii) Determine the new date on which the loan will be repaid.
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