Solution-Find the amount of the level annual repayment

Find the amount of the level annual repayment

Reference no: EM133197422

A businessman wishes to borrow an amount of K3 million for a term of 5 years. The agreed rate of interest is 5% per annum effective for the first 3 years, and 7% per annum effective thereafter. Repayments on the loan are made annually in arrears.

(a) Find the amount of the level annual repayment.

(b) Draw up the loan schedule for the full five-year period.

(d) Without doing any further calculations, explain how this percentage figure would alter if the rate of interest had instead been 7% for the first three years and 5% thereafter.

Reference no: EM133197422

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Find the amount of the level annual repayment

Reference no: EM133197422

Reference no: EM133197422

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