MSMB Engineering purchased and installed a smog control equipment. The company obtained a loan of RM400,000 at an interest rate of 9% compounded monthly to finance the equipment for eight years.

MSMB Engineering purchased and installed a smog control equipment. The company obtained a loan of RM400,000 at an interest rate of 9% compounded monthly to finance the equipment for eight years. (a) What is the monthly nominal interest rate? (b) Calculate the annual effective interest rate. (c) What is the monthly loan payment? (d) (i) What is the loan balance after 46 payments? Calculate the total amount of principal paid after forty six (46) payments are made. (iii) Calculate the total amount of interest paid after forty six (46) payments are made. (e) There will be no maintenance cost during the first two years of ownership because the machine is sold with two years free maintenance. Maintenance costs of RM10,000 for the equipment will start from year three onwards until year eight. MSMB Engineering needs to withdraw these amounts of maintenance costs from a savings account that earns an interest of 5% compounded annually. (1) What would be the total value of the maintenance cost at the beginning of year three (end of year two)? How much would MSMB Engineering need to deposit in the savings account now (year 0)