Lisa is borrowing RM 60,800 to purchase a car. The loan terms are 9 years at 4.5 percent interest per year.

 i. How much is her monthly payment? (3 marks)

 ii. How much interest will she pay on this loan if she pays the loan as agreed? (3 marks)

 iii. If she is considering to shorten the loan term to 5 years only with the same interest rate of 4.5 percent per year, how much will be her monthly payment? (3 marks)

 iv. Compare the total interest that she needs to pay if the term loan is 9 years and 5 years. What is the different amount? (3 marks)

v. Based on your analysis, advise Lisa whether she should sign the 9 years or 5 years term loan. (3 marks)

Answer rating: 100% (QA)

SOLUTION i To calculate Lisas monthly payment we can use the formula for the present value ... View the full answer