Airtel Company wants to acquire an equipment worth Kshs. 80,000 Kuber Finance Company offers a hire purchase financing to Airtel Company. The hire purchase installments will be paid annually for eight years and Kuber will calculate interest at a flat rate of 14%
Required:
i. Calculate the interest distribution over the eight years using the sum of years digit (SYD) approach
(7mks)
ii. Calculate Kuber's Internal Rate of Return (IRR) for financing Airtel
company
(8mks)