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The Alpha Corporation obtains a bank loan that is disbursed as follows: Shs 32 million, Shs 16 million, Shs 8 million, Shs 4 million and
The Alpha Corporation obtains a bank loan that is disbursed as follows: Shs 32 million, Shs 16 million, Shs 8 million, Shs 4 million and Shs 2 million at the beginning of years one, two, three, four and six respectively. The loan is repaid in four equal annual installments of Shs 8 million beginning at the end of years seven, and a final amount at the beginning of year 12. Given a rate of inflation of 4.0% per annum during the period, and if Alphas real cost of the loan is 17% per annum, what should the final repayment be?
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