The seller of the legal tech’ software states in its advertising material that a typical law firm can achieve an IRR over the seven-year life of the software licence of around 25%. You have done some research which shows that, after taking account of any interest payable on the loan, the law firm will make savings of£2,000 in the first year, and that the savings will increase by £500 each year for the duration of the software licence. i need answer of question 6 which is liked with question 5
The firm has contacted a bank to negotiate a loan to purchase the legal tech’ software. A loan of £10,000 will be needed and the bank has offered three options, each to begin on 1st February 2023:
£10,000 loan at 6% simple interest. The entire loan is to be repaid in one lump sum after five years, with interest paid at the end of each year of the loan.
£10,000 loan at 4% compound interest with amortised monthly repayments for five years
£10,000 loan at 4.5% compound interest, with both interest and principal to be paid in one lump sum at the end of five years.
Calculate the total of interest to be paid under each of the three options. Show your workings in full.
QUESTION 6
The seller of the legal tech’ software states in its advertising material that a typical law firm can achieve an
You have done some research which shows that, after taking account of any interest payable on the loan, the law firm will make savings of£2,000 in the first year, and that the savings will increase by £500 each year for the duration of the software licence.
i need answer of question 6 which is liked with question 5
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
