In case that the Co. decides to go for a loan, The bank offers the following conditions:

NP of the loan: 400,000 USD

r_fix = 6%

r_var = Euribor + 1%

Loan to be paid back in constant periodical payments during the next 5 years.

If the Co. decides to take the Loan under constant interest rate conditions, and the payments are to be done on a yearly basis, what is the amount of each yearly payment the Co. will have to pay back to the bank during the next 5 years? And how much will have paid the Company over those 5 years?

If the Co. decides to take the Loan under constant interest rate conditions, and the payments are to be done on a monthly basis, what is the amount of each monthly payment the Co. will have to pay back to the bank during the next 5 years? And how much will have paid the Company over those 5 years?

Answer rating: 100% (QA)

To calculate the amount of each yearly payment and the total amount the company will have paid over 5 years for the loan we can use the formula for ca... View the full answer