FBS 210 revision

After you have completed your studies, you decide to purchase a car. The cost price of the car amounts to R120 000 and a financial institution is willing to finance the car at an interest rate of 18% per year, compounded monthly over a term of 5 years. Three years after you have started with the repayment of the car, the interest rate declined to 15% per yean (a) Calculate the difference in installment after the interest rate change. (b) Calculate the total amount of interest that you will pay over the 5 year period