Question 4

Mr Banda is struggling to repay his loan of K400,000 with payments of K7,200 made monthly in arrears for 6 years.

(a) Calculate the at rate of interest per annum

(b) Hence, or otherwise, calculate the APR of Mr Bandas loan

(c) Assuming the company charges the same APR as Mr Bandas original loan, calculate the term of the new loan

(d) Calculate how much more interest in total Mr Banda will pay on his restructured loan than on his original loan