QUESTION 1

PART A:

Ishtaq has applied for a loan for 250,000 dirhams to buy a 350,000 dirham car, so he made a down payment of 100,000 dirhams. The interest rate for a conventional fixed-rate, fixed-term, amortizing loan is 3% per year. He takes the loan for 5 years (60 months) and will make equal monthly payments for 60 months. Calculate his loan to value ratio to the nearest percent for this loan.

a.

29

b.

140

c.

40

d.

71

PART B:

Ishtaq has applied for a loan for 250,000 dirhams to buy a 350,000 dirham car, so he made a down payment of 100,000 dirhams. The interest rate for a conventional fixed-rate, fixed-term, amortizing loan is 3% per year. He takes the loan for 5 years (60 months) and will make equal monthly payments for 60 months. Calculate his monthly payment (to the nearest fil).

a.

4492.17

b.

6209.04

c.

9033.24

d.

12,646.54

e.

none of the above