Suppose Canton Ltd borrows sh. 15,000,000 and the loan is to be repaid in 3 equal payments at the end of each of the next 3 years. The lender is to receive 8% interest on the loan balance outstanding at the start of each year. loan amortization schedule indicating the interest payments and loan balance.

Illustration 2

Blake Urban Ltd just borrowed $25,000. The loan is to be repaid in equal installments at the end of each of the next 5 years and the interest rate is 10%. Set up an amortization schedule for the loan.

Illustration 3

Aston wants to buy a home in Lavington. He has approached HFC for a loan of sh. 40,000,000 over a time period of 25 years. The Annual percentage rate (APR) is quoted at 13% p.a. Calculate the monthly repayment of the mortgage in the following ways;

i) Using annual payment method.

ii) Using annual interest method.