Question: The original quarterly repayment amount using the formula for a fixed installment loan: Original loan amount (P) = N$1,500,000 Interest rate per year (r) =

The original quarterly repayment amount using the formula for a fixed installment loan: 

  1. Original loan amount (P) = N$1,500,000 

  3. Interest rate per year (r) = 8% = 0.08 

  5. Interest rate per quarter (i) = 8% / 4 = 0.08 / 4 = 0.02

By how much will the quarterly repayments of Mr Vries be reduced?

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