1 A consumer borrows $10,000 to be repaid in monthly over one year at interest of 12% compounded monthly. Construct a complete amortisation table.

2 A company can borrow $200,000 for 15 years. They can amortize the debt at 11% p.a. or they can repay interest on the loan at 10.5% p.a. and set up a sinking fund at 7.5%p.a.to repay the principal in 15 years. Which plan is cheaper and by how much?

3 A recreational vehicle worth $46,000 is purchased with a down payment of $6,000 and monthly payments for 15 years. If the interest is at 10% compounded semi-annually,

(a) find the monthly payments required.

(b) complete the first 6 lines of the amortisation schedule.

4 The Andersons borrow $8,000 to be repaid in monthly instalments over 4 years at 12.5% interest compounded monthly. Find the amount of interest paid over the 4 years.

5 A borrower of $5,000 agrees to pay semi annual interest at 10% 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% interest compounded semi annually,

(a) find his total semi annual expense

(b) How much is in the sinking fund at the end of 4 years.

6 To pay off the purchase of a car, Chantal got a $15,000, 4 year bank loan at 9% p.a. interest compounded monthly. She makes monthly repayments. How much does she still owe on the loan at the end of 2 years (after 24 payments)? Use both retrospective and prospective methods.

7 Martha buys a piece of land worth $40,000 by paying $10,000 down and then taking out a loam for $30,000. The loan will be retired with quarterly payments over 15 years with 10% interest compounded quarterly. Find her equity at the end of 9 years.

8 Elizabeth is repaying a loan of $5,000 with monthly payments over 3 years at an interest of 16.5% compounded monthly. At the end of the first year she makes an extra single payment of $500. She then shortens her repayment period by one year and renegotiates the loan without an interest rate change. Find the new monthly payment and the interest amount she saves by refinancing.

9. A 20 year loan of 1,000 is repaid with payments at the end of each year, Each of the first ten payments equals to 150% of the amount of interest due. Each of the last 10 payments is X. The lender charges interest at annual effective rate of 10%. Calculate X.