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Compute the interest owed at the end of 2nd month

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Reference no: EM132638525

Alice was approved a home equity loan of RM300,000 from National bank to support her purchase of a double storey house. The interest rate is stated at 1.25% above base rate. The repayment period is 30 years and the monthly instalment is RM1,561.61. The current base rate is at 4%.

(i) Compute the interest owed at the end of 2nd month.

(ii) Compute the new outstanding loan balance after two months payment.

(iii) Explain how bank determine the "1.25%" rate.

Reference no: EM132638525

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