On 1/1/2017, a loan of RM80,000 was taken and has to be repaid in level payment at the end of each month for 10 years. (i) Calculate the level monthly payment using an effective rate of interest of 8% per annum.On 1/11/2019, immediately after the payment, the monthly payment is reduced to RM910 and the remaining term is extended to clear the outstanding loan balance. The final smaller payment is to be paid one month after the last regular monthly payment. In addition, a service charge of RM955 is added to the loan outstanding on 1/11/ 2019 and the interest rate applied in future is increased to 9% per annum convertible monthly. (ii) Determine the new date on which the loan will be repaid.
On 1/1/2017, a loan of RM80,000 was taken and has to be repaid in level payment at the end of each month for 10 years. (i) Calculate the level monthly payment using an effective rate of interest of 8% per annum.On 1/11/2019, immediately after the payment, the monthly payment is reduced to RM910 and the remaining term is extended to clear the outstanding loan balance. The final smaller payment is to be paid one month after the last regular monthly payment. In addition, a service charge of RM955 is added to the loan outstanding on 1/11/ 2019 and the interest rate applied in future is increased to 9% per annum convertible monthly. (ii) Determine the new date on which the loan will be repaid.
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 15P
Related questions
Question
On 1/1/2017, a loan of RM80,000 was taken and has to be repaid in level payment at the end of each month for 10 years.
(i) Calculate the level monthly payment using an effective rate of interest of 8% per annum.On 1/11/2019, immediately after the payment, the monthly payment is reduced to RM910 and the remaining term is extended to clear the outstanding loan balance. The final smaller payment is to be paid one month after the last regular monthly payment. In addition, a service charge of RM955 is added to the loan outstanding on 1/11/ 2019 and the interest rate applied in future is increased to 9% per annum convertible monthly.
(ii) Determine the new date on which the loan will be repaid.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 3 images
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Pfin (with Mindtap, 1 Term Printed Access Card) (…
Finance
ISBN:
9780357033609
Author:
Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning