Question
For the purchase of a property, you received a 750,000 loan today with an interest rate of 12% compounded quarterly. The duration of the loan
For the purchase of a property, you received a 750,000 loan today with an interest rate of 12% compounded quarterly. The duration of the loan is 3 years and its repayment is made in equal amounts quarterly installments paid at the end of each quarter. A) Calculate: i. The quarterly installment of the loan that you will pay. (0.5 points) ii. The interest and amortization of each installment (create a loan amortization table) and the total interest you will have paid when it has been repaid loan. (0.5 points) iii. Paying off the loan, assuming you plan to repay the loan in 2 years from today (i.e. in the 8th quarter). (0.5 points) iv. The quarterly installment you would pay if the loan had a duration of 10 years. (0.5 points) B) Briefly explain how the loan repayment term affects its amount installment and the amount of interest? (0.5 points)
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