You receive a loan of $1,000,000 to be repaid in six monthly installments at 2% per month. Calculate the monthly repayment using the CRF approach.

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11. Compute the quarterly repayment for a three-year loan of $500,000 if the interest rate is 12% per annum. (Use CRF approach)

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part 1 The CRF Capital Recovery Factor approach is a method of determining the equal monthly payments required to pay off a loan over a specific period taking into account the interest rate and the repayment period To calculate the monthly repayment for this loan we can use the formula Monthly Payment Loan Amount x CRF Repayment Period where Loan Amount 1000000 Repayment Period 6 months Interest Rate per month 2 The formula for CRF can be calculated as follows CRF i1in1in1 where i interest rate per month n number of periods In this case i 2 002 and n 6 Plugging in these values we get CRF 00210026100261 019122 Now we can calculate the monthly payment ... View the full answer