An individual obtain 100000cedis loan from Ahmed bank limited to be repaid over a period of 5 years. The bank is charging an interest of 6percent per annum and deduction are to be made on monthly basis . a) how will the individual pay if the bank is using the add on rate approach every month. b) At the end of the maturity period, how much will the individual pay ? c) what if the bank is using home mortgage method to calculate the interest rate . How much will the individual pay on a monthly basis ? What will be the total money the individual would have paid for 5 years ( at the end of the loan period ) d) prepare an ammortised schedule for the borrower e) As a consultant which of these two methods will you recommend and why ?

An individual obtain 100000cedis loan from Ahmed bank limited to be repaid over a period of 5 years. The bank is charging an interest of 6percent per annum and deduction are to be made on monthly basis . a) how will the individual pay if the bank is using the add on rate approach every month. b) At the end of the maturity period, how much will the individual pay ? c) what if the bank is using home mortgage method to calculate the interest rate . How much will the individual pay on a monthly basis ? What will be the total money the individual would have paid for 5 years ( at the end of the loan period ) d) prepare an ammortised schedule for the borrower e) As a consultant which of these two methods will you recommend and why ?