Reference no: EM133157695

Question -

a. GP Plastics that make hydraulic seals borrowed $1,800,000 to expand its packaging and shipping facility. The contract required the company to repay the investors through an innovative mechanism called synthetic dividend, a series of uniform annual payments over a fixed period of time. If the company paid $250,000 per year for 12 years, what was the interest rate on the loan?

b. An engineer who work with Sarawak Shell Berhad had RM 1.6 million in his investment portfolio. However, due to a COVlD-19 pandemic last 2 years caused his portfolio to decrease to only 55% of the original amount, so he kept working. If he was able to invest his money at a rate of return of 9% per year after the pandemic ended, how many years did it take for his account to get back to the RM1.G million value?

c. Suppose you borrowed RM35,000 at a rate of 7.5% and must repay it in 5 equal instalments at the end of each of the next 5 years. How much would you still owe at the end of the first year, after you have made the first payment? Provide the amortization schedule.