Batrisyia plans to buy a house but refuse to pay regular installments to the bank at...
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Batrisyia plans to buy a house but refuse to pay regular installments to the bank at the end of each year. Instead, she customized her loan which requires her to make yearly payments of RM200 in the first year, and the following subsequent payments will be an increment of 8% over the previous payment. This agreement will be maintained up until the tenth payment. After the tenth payment, the subsequent payments now will decrease by 5% over the previous payment. This agreement uses an effective rate of interest of 8% per annum. i) ii) iii) iv) Calculate the present value of this contract if Batrisyia only made payment up until 20 payments. Construct the amortization schedule for the 7th to 14th payment. If Batrisyia wishes to have a level payment from the 15th payment onwards, but still maintain the same present value found in (i), calculate the new level payment. Show the new amortization for the 15th payment onwards. Batrisyia plans to buy a house but refuse to pay regular installments to the bank at the end of each year. Instead, she customized her loan which requires her to make yearly payments of RM200 in the first year, and the following subsequent payments will be an increment of 8% over the previous payment. This agreement will be maintained up until the tenth payment. After the tenth payment, the subsequent payments now will decrease by 5% over the previous payment. This agreement uses an effective rate of interest of 8% per annum. i) ii) iii) iv) Calculate the present value of this contract if Batrisyia only made payment up until 20 payments. Construct the amortization schedule for the 7th to 14th payment. If Batrisyia wishes to have a level payment from the 15th payment onwards, but still maintain the same present value found in (i), calculate the new level payment. Show the new amortization for the 15th payment onwards.
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To solve this problem well calculate the present value of the contract construct the amortization schedule for the specified payments and then adjust ... View the full answer
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780135811603
5th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Posted Date:
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