In order to start a small business, Samy borrowed RM40, 000 from a bank. The loan is repaid by monthly installment for five years. The interest charged is 5% on the original balance. (a) Determine the monthly payment. (b) Immediately after paying for three years and six months, he decided to pay off the loan. Using the Rule of 78, calculate the amount he has to pay.

In order to start a small business, Samy borrowed RM40, 000 from a bank. The loan is repaid by monthly installment for five years. The interest charged is 5% on the original balance. (a) Determine the monthly payment. (b) Immediately after paying for three years and six months, he decided to pay off the loan. Using the Rule of 78, calculate the amount he has to pay.

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 25PROB

See similar textbooks

Similar questions

Carlos opens a dry cleaning store during the year. He invests 30,000 of his own money and borrows 60,000 from a local bank. He uses 40,000 of the loan to buy a building and the remaining 20,000 for equipment. During the first year, the store has a loss of 24,000. How much of the loss can Carlos deduct if the loan from the bank is nonrecourse? How much does Carlos have at risk at the end of the first year?
Samuel Ames owes 20,000 to a friend. He wants to know how much he would have to pay if he paid the debt in 3 annual installments at the end of each year, which would include interest at 14%. Draw a time line for the problem. Indicate what table to use. Look up the table value and place it in a brief formula. Solve.
Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264
Mr. So borrowed Php200,000 from a cooperative that charges 15% yearly. He used the loan to start his food stand business. How much will he pay for the loan after 18 months?
Elwin Tulpo invests Php1,000 in a Bank at 10% a year for five years, but when the interest is credited at the end of each year, he leaves it in his account. What amount does he have at the end of five years?
Nur's father bought a car for RM104,000. He paid an advance of RM24,000 and the balance will be paid in annual installments for 7 years. What is the amount to be paid at the end of each year by Nur's father if the party the finance company in question charges an interest rate of 4% per annum?