1.Suppose that a client borrows a loan amount of R50,000 at annual interest rate of 10% compounded monthly. a) In order to repay the loan in 60 months, we determine that the client should pay a monthly instalment  of   a. R1,262.35   b. R2,000   c. None   d. R1,062.35 b)  If the client wants to finish paying the loan in 20 months, then the client should pay a monthly instalment of   a. R1,062.35   b. R3,000   c. None   d. R2,724.50

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 31P
icon
Related questions
Question

1.Suppose that a client borrows a loan amount of R50,000 at annual interest rate of 10% compounded monthly.

a)

In order to repay the loan in 60 months, we determine that the client should pay a monthly instalment  of

  a.

R1,262.35

  b.

R2,000

  c.

None

  d.

R1,062.35

b) 

If the client wants to finish paying the loan in 20 months, then the client should pay a monthly instalment of

  a.

R1,062.35

  b.

R3,000

  c.

None

  d.

R2,724.50

Expert Solution
steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Effective Annual Rate Of Return
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Pfin (with Mindtap, 1 Term Printed Access Card) (…
Pfin (with Mindtap, 1 Term Printed Access Card) (…
Finance
ISBN:
9780357033609
Author:
Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:
Cengage Learning
PFIN (with PFIN Online, 1 term (6 months) Printed…
PFIN (with PFIN Online, 1 term (6 months) Printed…
Finance
ISBN:
9781337117005
Author:
Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:
Cengage Learning
EBK CFIN
EBK CFIN
Finance
ISBN:
9781337671743
Author:
BESLEY
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course…
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
Entrepreneurial Finance
Entrepreneurial Finance
Finance
ISBN:
9781337635653
Author:
Leach
Publisher:
Cengage