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QUESTION 1 AFBF Tech Limited plans to develop a new device for health monitoring. To fund for the development of this project, a loan worth of RM500, 000 has been made from MXX Bank. The interest charges by MXX Bank vary depending on the term of the loan. Given the rate of interest in Table 1. Term of the loan (t) 3 years Interest rate 10% compounded charged (%) monthly 5 years 6.6% compounded every 2 months 8 years 4.8% compounded quarterly Table 1 a) Advice which is the best term the company should sign for the loan by finding the instalment payment and the interest. Justify your answer. b) Hence, the company plans to settle all the outstanding arrears in one payment after 25 months the device being released into the market. How much is the payment will be according to the chosen term in (a)? c) Based on chosen term in (a), how much should the company pay on the tenth payment to settle the outstanding arrears if the company fails to pay the first ninth payment?

QUESTION 1 AFBF Tech Limited plans to develop a new device for health monitoring. To fund for the development of this project, a loan worth of RM500, 000 has been made from MXX Bank. The interest charges by MXX Bank vary depending on the term of the loan. Given the rate of interest in Table 1. Term of the loan (t) 3 years Interest rate 10% compounded charged (%) monthly 5 years 6.6% compounded every 2 months 8 years 4.8% compounded quarterly Table 1 a) Advice which is the best term the company should sign for the loan by finding the instalment payment and the interest. Justify your answer. b) Hence, the company plans to settle all the outstanding arrears in one payment after 25 months the device being released into the market. How much is the payment will be according to the chosen term in (a)? c) Based on chosen term in (a), how much should the company pay on the tenth payment to settle the outstanding arrears if the company fails to pay the first ninth payment?

Essentials Of Investments
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
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QUESTION 1 AFBF Tech Limited plans to develop a new device for health monitoring. To fund for the development of this project, a loan worth of RM500, 000 has been made from MXX Bank. The interest charges by MXX Bank vary depending on the term of the loan. Given the rate of interest in Table 1. Term of the loan (t) 3 years Interest rate 10% compounded charged (%) monthly 5 years 6.6% compounded every 2 months 8 years 4.8% compounded quarterly Table 1 a) Advice which is the best term the company should sign for the loan by finding the instalment payment and the interest. Justify your answer. b) Hence, the company plans to settle all the outstanding arrears in one payment after 25 months the device being released into the market. How much is the payment will be according to the chosen term in (a)? c) Based on chosen term in (a), how much should the company pay on the tenth payment to settle the outstanding arrears if the company fails to pay the first ninth payment?
Transcribed Image Text:QUESTION 1 AFBF Tech Limited plans to develop a new device for health monitoring. To fund for the development of this project, a loan worth of RM500, 000 has been made from MXX Bank. The interest charges by MXX Bank vary depending on the term of the loan. Given the rate of interest in Table 1. Term of the loan (t) 3 years Interest rate 10% compounded charged (%) monthly 5 years 6.6% compounded every 2 months 8 years 4.8% compounded quarterly Table 1 a) Advice which is the best term the company should sign for the loan by finding the instalment payment and the interest. Justify your answer. b) Hence, the company plans to settle all the outstanding arrears in one payment after 25 months the device being released into the market. How much is the payment will be according to the chosen term in (a)? c) Based on chosen term in (a), how much should the company pay on the tenth payment to settle the outstanding arrears if the company fails to pay the first ninth payment?
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