A firm has take a loan of $8000000 at an interest rate of 9% p.a. The term for repayment is 15 years. The loan payment is done using the amortization model.

 

Present Cash flow table indicating the interest and principal repayments when the loan is repaid under 

(a) Yearly instalments

 (B) Half yearly instalments

 (c) Quarterly instalments 

(d) Monthly instalments. 

Show the savings in interest with increase in frequency of payment.

Answer rating: 100% (QA)

To calculate the interest and principal repayments for different frequencies of loan repayments we need to use the amortization formula The formula ca... View the full answer