A bank has organized a loan campaign that will last until 01 July 2020. Accordingly, a loan of 25,000 TL can be used with a monthly interest rate of 1.08%. The loan will be paid in equal installments. The Bank and Insurance Transaction Tax (BITT) rate for loan transactions is 5% and the Fund for Resource Utilization Support (RUSF) rate is 15%. However, the person applying for a loan thinks to close the loan immediately after receiving the 7-month installment (the same day) after receiving the retirement bonus. There are options to get the loan in 12-month and 18-month terms. In addition to the loan purchase expenses, which is 150 TL regardless of maturity, the insurance fees are determined as follows for each loan term:

82.70 TL insurance fee for 12-month loan

124.50 TL insurance fee for 18-month loan

c) When the 7th month installment of the loan is paid and the closing is made early;

c1) Calculate separately how much the principal closure balance will be for both options. (Hint: You should calculate the remaining installments at the end of the 7th month over the nominal cost rate.)

c2) For both options, calculate the monthly loan costs in the early closure situation, the annual simple and annual compound loan costs based on the monthly loan costs. Attention..! The bank will refund the insurance fees for the remaining months of the loan you closed early after the 7th month. (For example, 82.70 x 5 months / 12 months for 12-month loan) Please note that these costs should be considered as collection / cash inflows for you, despite the installment payments.