A loan of $50,000 is made today. This loan will be repaid by a first smaller repayment, followed by 15 level
repayments, i.e., there are 16 repayments in total.
The first smaller repayment will occur exactly 3 years from today and each subsequent repayment (starting from the first level repayment) will occur exactly 1 year after the previous repayment. Explicitly, the final repayment will occur exactly 18 years from today.
If the interest being charged on this loan is 7.9% per annum compounded half-yearly, and the first smaller repayment is $760,
(a) Calculate the loan outstanding exactly 2 years from today.
(b) Calculate the loan outstanding exactly 3 years from today immediately after the first smaller repayment.
(c) Calculate the amount of the level repayments.
1.) Loan Amount = $50,000 Interest Rate = 7.9% Compounded Semi-Annually Loan Outstanding exactly after 2 years = Loan Amount... View the full answer