question 1)

The finance manager of Emidio Ltd recently visited Enzio Bank to check out their hire purchase loan as the company is planning to buy a new delivery van priced at $201,000. He was offered the following terms for the purchase of the new van:

Loan principal - 60% of purchase price

Loan repayment period - 5 years

Interest rate - 3.07% per annum 'flat'

a) Calculate the monthly instalment of the loan (round your answer to the nearest cent)

b) Enzio Bank adjusted the hire purchase loan interest rate this week. The monthly instalment for the loan is now $2,682.68. Calculate the effective interest rate (per annum) of the loan based on the new monthly instalment of $2,682.68