Question
Bobby Bragg has decided to buy a 10-year old car from Banger Motors for $6 000. Rockwelle Finance has offered Bobby a 4-year loan at
Bobby Bragg has decided to buy a 10-year old car from Banger Motors for $6 000. Rockwelle Finance has offered Bobby a 4-year loan at an annual interest rate of 15% p.a. with annual payments at the end of each year.
Required:
(1) What is Bobbys annual loan repayment amount?
(2) What is the principal component of the year 2 loan repayment?
(3) What is the interest component of the year 3 loan repayment?
(4) What is the opening balance of the loan at the commencement of year 4?
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Financial Markets And Institutions
Authors: Anthony Saunders, Marcia Cornett
7th Edition
1259919714, 978-1259919718
