e

An investor wishes to borrow 39,000 from a bank at an effective rate of interest of 8.7% per annum to finance the expansion of his business. The project is expected to generate net revenues of 6,840 per annum payable monthly in arrears for the next 11 years. (a) Find the discounted payback period for this project (in whole months). ; [2] (b) Once the loan has been repaid, the investor can earn 3.8% per annum convertible monthly on investing the revenues received. Making use of the result from part (a), find the total profit that the investor will make at the end of the 11-year investment project. ; [2] Check