1. A car priced at $3,000 is brought on 10% down payment with the balance to be repaid by monthly instalments over 3 years at 14% p.a. flat. a) Calculate the monthly instalment. b) Using Excel create a complete repayment schedule for this loan using the Rule of 78. c) Calculate the annual effective rate of interest being charged. d) Using Excel create a complete repayment schedule for this loan using the compound interest method. e) If the car is paid off just after the 12th instalment has been made, find the amount needed using: i) Rule of 78 ii) Compound interest method.

2. A lending finance company offers 4 year loans at 11.5% flat, repayable with monthly instalments. For a loan of $600 find the: a) monthly instalment. b) effective annual rate of interest is being charged. c) loan outstanding after 1 year according to the Rule of 78 method.

3. Sam borrows $5,000 and agrees to pay interest rate of 10% p.a. compounded semi-annually on the loan and to build up a sinking fund which will repay the loan at the end of 5 years. If the sinking fund accumulates at 7% p.a. compounded semi-annually find: a) the total half-yearly expense. b) how much is in the sinking fund at the end of 4 years?