A company intends to borrow RTGS$150 000 to finance the purchase of new machinery. The Finance manager is considering taking a 12% loan from First Capital Bank that will be amortized over the next 8 years in equal instalments.

Required:

2. Determine the amount of money the company is expected to pay annually (4 marks)
4. Calculate the interest payment (16 marks)
6. Calculate the total amount that will be used to discharge the loan (5 marks)

1. Basket Wonders has a $1 000 CD at the Bank. The interest rate is 6% compounded quarterly for 1 year. Determine the Effective Annual Interest rate. (EAR) (5 marks)

Answer rating: 100% (QA)

To answer your questions lets calculate the amount of money the company is expected to pay annually the interest payment and the total amount that wil... View the full answer