Choose the Bank which is located in Turkey and calculate the real annual cost after the inflation
Question:
Choose the Bank which is located in Turkey and calculate the real annual cost after the inflation of borrowing from a chosen Bank, suppose you will borrow 100,000 Turkish Lira, and you are responsible to pay back the loan in equal 12 monthly installments, Certain initial deductions such as Loan allocation fee and Credit Life Insurance Premium are to be made. You need to get the necessary information such as above for instance (monthly installment amount, initial deductions) from the web sites of the banks.
Please indicate the relevant data below:
Name of the Bank: ................................................
Amount Borrowed = 100,000 TL.
Number of Installments = 12
(Monthly Repayment) Installment Amount =…................... TL
Frequency of Installments: Monthly
State any Initial Deductions below:
Loan Allocation Fee, if any = …................................. TL
Credit Life Insurance Premium, if any =….................................... TL
any other initial deductions, if any = …........................................ TL
(Attach the relevant screen shots of bank web site).
Prepare the 12-month Cash Flow table regarding the bank loan including Amount Borrowed, all Initial Deductions, and Monthly Repayment Amounts.
Calculate effective monthly cost of the bank loan via Internal Rate of Return (IRR) method (Attach the relevant table), effective monthly cost of the bank loan = ….......................%
Calculate effective annual cost of the bank loan. Effective annual cost of the bank loan = …...........................................................%
Write the latest annual inflation rate of CPI - Consumer Price Index = ….........................%
Write the annual CPI inflation rate for the last 12 months: 1...., 2...., 3...., 4...., 5...., 6...., 7...., 8...., 9...., 10...., 11....... ,12........ by taking into account the latest annual CPI inflation and recent 12-month trend, estimate the future annual inflation rate and write your estimation, estimated annual inflation rate = .......................%
Based on your estimation of the annual inflation rate, calculate the effective annual real cost of the bank loan. Effective annual real cost of the bank loan = …............................... %
Accounting
ISBN: 978-0324188004
21st Edition
Authors: Carl s. warren, James m. reeve, Philip e. fess