Jim borrowed $500,000 to purchase a house. The loan requires monthly repayments over 10 yrs. When he borrowed the money, the interest rate was 13.5%per annum, but 18 months later the bank increased the interest rate to 15% per annum, in line with the market rates. The bank tells Jim he can increase his monthly repayments (so as to pay off the loan by the original agreed date) or he can extend the term of the loan (and keep making the same monthly repayment) Calculate :\n

a. The new monthly repayment if James accepts the first option.

b. The extra period added to the loan term if James accepts the second option how to calculate in excel format? with excel formulas.

Answer rating: 100% (QA)

In this question while calculating the amortization schedule one things is important and that is the interest rate The interest rate is important because there are two types of interest rates 1 Fixed ... View the full answer