Home Insert Draw Page Layout Formulas Data >> Tell me Share Comments LO A %. FO Clipboard Font Conditional Formatting E Format as Table Alignment Number Alignment E Cell Stylos fix loan Amortizartisation sehedule Cells Editing a. How much will Shaikha need to borrow in order to buy the car? Loan amount-car price-deposit =1,500,000 AED-17.45583333% of 1,500,000) =1,500,000 AED-300,000 AED-1,200,000AED She will need to borrow 1.200,000 AED from Emirates Islamic Sen Analyze Data A14 B D E F b. Amortize the loan if annual payments are made for a period of 5-years. [Excel Calculation Below] 10 11 12 13 14 First you require to determine the annual payment using the formulae below: I CF = (PV X r) + 1 1 (1 + r)" 15 16 17 18 CF = (1,200,000 AED x 0.04)/(1-1/1.04)] = AED269552.5 Years loan Amortizartisation sehedule Loan principal 1,200,000AED Annual rate of interest 4% number of years 5 years annual payment 269,552.5 AED Annual Payment Total To interest to principal year end principal 269,552.5 AED 1,238,162.50 269,552.5 AED 48,000 221,552.50 1,016,610 269,552.5 AED 24,000 245,552.50 771,057.50 269,552.5 AED 16,000 253,552.50 517,505 269,552.5 AED 12,000 257,552.50 259,952.50 269,552.5 AED 9,600 259,952.50 o 6 loan Amortizartisation sehedule 19 20 21 22 23 24 25 26 27 7 8 9 Loan principal Annual rate of interest number of years annual payment 1,200,000AED 4% 5 years 269,552.5 AED Annual Payment To interest 10 11 to principal Years 6 Answer the highlighted questions 7 Total 269,552.5 AED 269,552.5 AED 269,552.5 AED 269,552.5 AED 269,552.5 AED 269,552 5 AED 8 9 10 11 48,000 24,000 16,000 12,000 9,600 year end principal 1,238,162.50 1,016,610 771,057.50 517,505 259,952.50 0 221,552.50 245,552.50 253,552.50 257,552.50 259,952.50 c. Change the tenor period to 60 months (5 Years) and generate the monthly spreadsheet. Clue: Divide the annual repayment amount above in the answer to question (b) by 12 to obtain the monthly payments and generate the spreadsheet. d. Do you think Shaikha should borrow on a fixed interest rate or variable (floating) interest rate across the entire loan repayment period? Why or why not? e. Why is it advantageous (disadvantageous) at times to borrow on a fixed interest rate? Why is it advantageous (disadvantageous) at times to borrow on a variable (floating) interest rate? f. Assuming that Shaika's credit rating is A. What can Shaikha do to ensure that she obtains a loan from (car loan financing bank name) at a much lower interest rate than provided in the market? 273 words English (United States) Home Insert Draw Page Layout Formulas Data >> Tell me Share Comments LO A %. FO Clipboard Font Conditional Formatting E Format as Table Alignment Number Alignment E Cell Stylos fix loan Amortizartisation sehedule Cells Editing a. How much will Shaikha need to borrow in order to buy the car? Loan amount-car price-deposit =1,500,000 AED-17.45583333% of 1,500,000) =1,500,000 AED-300,000 AED-1,200,000AED She will need to borrow 1.200,000 AED from Emirates Islamic Sen Analyze Data A14 B D E F b. Amortize the loan if annual payments are made for a period of 5-years. [Excel Calculation Below] 10 11 12 13 14 First you require to determine the annual payment using the formulae below: I CF = (PV X r) + 1 1 (1 + r)" 15 16 17 18 CF = (1,200,000 AED x 0.04)/(1-1/1.04)] = AED269552.5 Years loan Amortizartisation sehedule Loan principal 1,200,000AED Annual rate of interest 4% number of years 5 years annual payment 269,552.5 AED Annual Payment Total To interest to principal year end principal 269,552.5 AED 1,238,162.50 269,552.5 AED 48,000 221,552.50 1,016,610 269,552.5 AED 24,000 245,552.50 771,057.50 269,552.5 AED 16,000 253,552.50 517,505 269,552.5 AED 12,000 257,552.50 259,952.50 269,552.5 AED 9,600 259,952.50 o 6 loan Amortizartisation sehedule 19 20 21 22 23 24 25 26 27 7 8 9 Loan principal Annual rate of interest number of years annual payment 1,200,000AED 4% 5 years 269,552.5 AED Annual Payment To interest 10 11 to principal Years 6 Answer the highlighted questions 7 Total 269,552.5 AED 269,552.5 AED 269,552.5 AED 269,552.5 AED 269,552.5 AED 269,552 5 AED 8 9 10 11 48,000 24,000 16,000 12,000 9,600 year end principal 1,238,162.50 1,016,610 771,057.50 517,505 259,952.50 0 221,552.50 245,552.50 253,552.50 257,552.50 259,952.50 c. Change the tenor period to 60 months (5 Years) and generate the monthly spreadsheet. Clue: Divide the annual repayment amount above in the answer to question (b) by 12 to obtain the monthly payments and generate the spreadsheet. d. Do you think Shaikha should borrow on a fixed interest rate or variable (floating) interest rate across the entire loan repayment period? Why or why not? e. Why is it advantageous (disadvantageous) at times to borrow on a fixed interest rate? Why is it advantageous (disadvantageous) at times to borrow on a variable (floating) interest rate? f. Assuming that Shaika's credit rating is A. What can Shaikha do to ensure that she obtains a loan from (car loan financing bank name) at a much lower interest rate than provided in the market? 273 words English (United States)