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A family purchases a holiday cottage and borrows $900,000 from their bank at 5% per annum payable monthly. The level monthly instalments of principal and
A family purchases a holiday cottage and borrows $900,000 from their bank at 5% per annum payable monthly. The level monthly instalments of principal and interest are required for 20 years.
A. By setting up a loan repayment schedule, find the amount of loan repaid in first Three (3) months. (3 marks)
USE THE FORMAT BELOW
Month | Loan outstanding at start of month | Interest due | Principal repaid | Loan outstanding at the end of the month |
1 |
|
|
|
|
2 |
|
|
|
|
3 |
|
|
|
|
[Show workings here]
Monthly instalments: [ ]; [ ], [ ]
|
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