Reference no: EM133074039

Question 1 - Prepare (using a spreadsheet package) an entire duration amortization schedule as follows: Initial amount: Shs 10,000,000/=; rate of interest: 15% per annum; period: 13 years payable monthly in arrears. An additional amount of Shs 400,000/= is repaid with the 35th installment, and the monthly installment recomputed to fully pay the loan balance in the initially agreed period. The rate of interest is adjusted to 14% per annum with effect from the end of the fifth year. The monthly repayment is recomputed to fully pay the loan balance in the initially agreed period. The borrower enhances his monthly repayments by Shs 12,000/= per month from the end of month 84. The borrower is advanced an additional Shs 900,000/= at the end of month 102 and the monthly repayment is recomputed to fully pay the loan balance in 9 months less than had initially been agreed.

Question 2 - The Beta Corporation obtains a bank loan that is disbursed as follows: Shs 320 million, Shs 240 million, Shs 160 million and Shs 80 million at the beginning of years one, two, three, and five respectively. The loan is repaid in five equal annual installments of Shs 250 million at the end of years six to ten, and a final amount at the beginning of year 14. Given a rate of inflation of 3.5% per annum during the period, and if Beta's real cost of the loan is 16% per annum, what should the final repayment be?