Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Alice was approved a home equity loan of RM300,000 from National bank to support her purchase of a double storey house. The interest rate is

Alice was approved a home equity loan of RM300,000 from National bank to support her purchase of a double storey house. The interest rate is stated at 1.25% above base rate. The repayment period is 30 years and the monthly instalment is RM1,561.61. The current base rate is at 4%.

Compute the interest owed at the end of 2nd month. (4 marks)

(ii) Compute the new outstanding loan balance after two months payment.

(2 marks)

(iii) Explain how bank determine the "1.25%" rate.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles of Finance

Authors: Scott Besley, Eugene F. Brigham

5th edition

1111527369, 978-1111527365

More Books

Students also viewed these Finance questions