Summa Laude (Pty) Ltd ("Summa Laude") is an entity that owns various properties that the entity rents out as student accommodation. Summa Laude has identified a property (hereafter referred to as "Property 26") that, after thorough market research on the quantity and accommodation specification of student accommodation demand in the area, has been concluded to have a high probability of being a profitable investment. Property 26 can be purchased at a price of R 1 637 000. Summa Laude currently only has R250 000 cash at hand to allocate to the Property 26 purchase, according to the entity's cash flow budget. The entity intends to allocate the R250 000 to the purchase, and have also entered negotiations with Fluxul - DeNumerar Bank for the remaining finance required. Fluxul - De - Numerar Bank has indicated that the bank is willing to provide the loan to Summa Laude. The loan will have a 10.9% monthly compounding interest rate and a 3-year period attached to it. Repayment must occur in equal annual instalments. REQUIRED: Assist Summa Laude (Pty) Ltd by drafting the loan amortisation schedule. Round to two decimals where applicable. Show all calculations. SHOW ALL THE MANUAL MATHEMATICAL CALCULATIONS FOR ALL OF THE INTERESTS, PRINCIPLES AND BALANCES.
Summa Laude (Pty) Ltd ("Summa Laude") is an entity that owns various properties that the entity rents out as student accommodation. Summa Laude has identified a property (hereafter referred to as "Property 26") that, after thorough market research on the quantity and accommodation specification of student accommodation demand in the area, has been concluded to have a high probability of being a profitable investment. Property 26 can be purchased at a price of R 1 637 000. Summa Laude currently only has R250 000 cash at hand to allocate to the Property 26 purchase, according to the entity's cash flow budget. The entity intends to allocate the R250 000 to the purchase, and have also entered negotiations with Fluxul - DeNumerar Bank for the remaining finance required. Fluxul - De - Numerar Bank has indicated that the bank is willing to provide the loan to Summa Laude. The loan will have a 10.9% monthly compounding interest rate and a 3-year period attached to it. Repayment must occur in equal annual instalments. REQUIRED: Assist Summa Laude (Pty) Ltd by drafting the loan amortisation schedule. Round to two decimals where applicable. Show all calculations. SHOW ALL THE MANUAL MATHEMATICAL CALCULATIONS FOR ALL OF THE INTERESTS, PRINCIPLES AND BALANCES.
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:Summa Laude (Pty) Ltd ("Summa Laude") is an entity that owns various properties that the entity rents out as student
accommodation. Summa Laude has identified a property (hereafter referred to as "Property 26") that, after thorough
market research on the quantity and accommodation specification of student accommodation demand in the area, has
been concluded to have a high probability of being a profitable investment. Property 26 can be purchased at a price of R
1 637 000. Summa Laude currently only has R250 000 cash at hand to allocate to the Property 26 purchase, according
to the entity's cash flow budget. The entity intends to allocate the R250 000 to the purchase, and have also entered
negotiations with Fluxul - DeNumerar Bank for the remaining finance required. Fluxul - De - Numerar Bank has indicated
that the bank is willing to provide the loan to Summa Laude. The loan will have a 10.9% monthly compounding interest
rate and a 3-year period attached to it. Repayment must occur in equal annual instalments. REQUIRED: Assist Summa
Laude (Pty) Ltd by drafting the loan amortisation schedule. Round to two decimals where applicable. Show all
calculations. SHOW ALL THE MANUAL MATHEMATICAL CALCULATIONS FOR ALL OF THE INTERESTS, PRINCIPLES AND
BALANCES.
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