You have been approached to structure a payment plan for a bank client who has been...

 

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You have been approached to structure a payment plan for a bank client who has been granted a loan of R160 000 at 11% per annum for 60 months. The client is faced with some difficulties so cannot afford the loan payment initially for the first 3 years. However, from the beginning of year 4 the client would be able to contribute an extra amount every year for the rest of the term to ensure that they payoff the loan in the stipulated term. Draw up an amortization table and answer the questions below. All answers to the nearest cents. NB: Extra payment not Growth. 1. What would have been the normal monthly payment for a loan like this? R 2. If the client can only afford R1500 for the first 2 years, what should be the extra payment each month when the client starts making the normal payments for the loan from the beginning of year 3? R 3. How much total interest would be paid over the entire period? R You have been approached to structure a payment plan for a bank client who has been granted a loan of R160 000 at 11% per annum for 60 months. The client is faced with some difficulties so cannot afford the loan payment initially for the first 3 years. However, from the beginning of year 4 the client would be able to contribute an extra amount every year for the rest of the term to ensure that they payoff the loan in the stipulated term. Draw up an amortization table and answer the questions below. All answers to the nearest cents. NB: Extra payment not Growth. 1. What would have been the normal monthly payment for a loan like this? R 2. If the client can only afford R1500 for the first 2 years, what should be the extra payment each month when the client starts making the normal payments for the loan from the beginning of year 3? R 3. How much total interest would be paid over the entire period? R

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Answers 1 The monthly payment for the loan of R16000 at 119 per annum for 60 months can be calculated as follows Monthly Payment Loan Amount x Interes... View the full answer