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A loan of nominal amount of RM100,000 will be repaid at 110% after 15 years. The loan provides interest of 9% per annum payable annually.
A loan of nominal amount of RM100,000 will be repaid at 110% after 15 years. The loan provides interest of 9% per annum payable annually. On the issue date, the loan is purchased for RM80,000 by an investor who is liable to income tax at the rate of 40% and to capital gains tax at the rate of 30%. Calculate the investors net effective annual yield for this transaction.
please show complete work without excel.
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