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( a ) A loan of K 9 2 , 0 0 0 is repayable over 2 5 years by level monthly instalments in arrears

(a) A loan of K92,000 is repayable over 25 years by level monthly instalments in arrears of capital and interest. The repayments are calculated using an effective rate of interest of 8% per annum. Calculate:
(i)
a. The capital repaid in the first monthly instalment.
b. The total amount of interest paid during the last six years of the loan.
c. The interest included in the final monthly payment. [8]
(ii) Explain how your answer to (i)(b) would alter if, under the original terms of the loan, repayments had been made less frequently than monthly.

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