Dr Musonda is struggling to repay his loan of K600,000 with payments of K12,800 made monthly in arrears for 5 years. After exactly one year, a loan company offers to “help” Dr Musonda by restructuring his loan with new monthly payments of K9,000 made in arrears. (i) Assuming the company charges the same APR as Dr Musonda’s original loan, calculate the term of the new loan. (ii) Calculate how much more interest in total Dr Musonda will pay on his restructured loan than on his original loan.

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Calculating the Return On A Loan