Make use of the relevant interest and discount values provided in the table below to determine:...
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Make use of the relevant interest and discount values provided in the table below to determine: a) Mutelo Investments borrows N$5 000 000 from a bank at an interest of 10 % per annum. The loan will be repaid in 10 equal instalments at the end of each year. Calculate the annual repayment amount. Use the correct table to choose the interest factor. (3) Present Value Interest 10% Years 1 2 3 4 5 6 7 8 9 10 PVIF 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 Present Value Interest Factor of an Annuity 10% Years 1 2 3 4 5 6 7 8 9 10 PVIFA 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6,145 b) From the annual repayment calculated in (a) split the amount into interest and principal for year 1. (2) c) State and briefly explain 4 areas where time value for money is applied in the areas of financial decision-making. (12) Make use of the relevant interest and discount values provided in the table below to determine: a) Mutelo Investments borrows N$5 000 000 from a bank at an interest of 10 % per annum. The loan will be repaid in 10 equal instalments at the end of each year. Calculate the annual repayment amount. Use the correct table to choose the interest factor. (3) Present Value Interest 10% Years 1 2 3 4 5 6 7 8 9 10 PVIF 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 Present Value Interest Factor of an Annuity 10% Years 1 2 3 4 5 6 7 8 9 10 PVIFA 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6,145 b) From the annual repayment calculated in (a) split the amount into interest and principal for year 1. (2) c) State and briefly explain 4 areas where time value for money is applied in the areas of financial decision-making. (12)
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Related Book For
Entrepreneurial Finance
ISBN: 978-0538478151
4th edition
Authors: J . chris leach, Ronald w. melicher
Posted Date:
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