Question
Ms. Constance Opie has had approval from the Mercantile Finance Agency for a loan of $25,000 to be used for home renovations. The lender has
Ms. Constance Opie has had approval from the Mercantile Finance Agency for a loan of $25,000 to be used for home renovations. The lender has agreed to a 5-year loan at a simple interest rate of 100/0 p.a. calculated on a simple interest basis. Repayments of interest and 200/0 of the outstanding loan amount are required at the end of each of the 5 year loan term. (a) Calculate the annual interest repayment on the loan. (b) Calculate the annual principal repayment on the loan. (c) Calculate the total annual repayment on the loan. (d) Calculate the total interest payable on the loan. (e) Calculate the payout amount after the 4th year's repayment.
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