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Paul Smith has just taken out a 3 M HUF mortgage loan with 2% interest rate. According to the contract he has to pay annuity for 12 years (once a year). The first instalment will be due in 1 year.
a) What will be the annual amount due (the value of the instalment)?
b) What will be the value of the mortgage loan at the end of the 2nd year if the instalment for the 2nd year already have been paid?
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