A loan of $50,000 is made today. This loan will be repaid by a first smaller...
A loan of $50,000 is made today. This loan will be repaid by a first smaller repayment, followed by 15 level repayments, i.e., there are 16 repayments in total.
The first smaller repayment will occur exactly 3 years from today and each subsequent repayment (starting from the first level repayment) will occur exactly 1 year after the previous repayment. Explicitly, the final repayment will occur exactly 18 years from today.
If the interest being charged on this loan is 4.8% per annum compounded half-yearly, and the first smaller repayment is $570,
(a) Calculate the loan outstanding exactly 2 years from today.
Homework Answers
Future value=Present value*(1+Rate)^number of periods
= 50000*(1+ 4.8%/2)^(2*2)
=50000* 1.024^4
= 54975.58
Loan outstanding after 2 years = $54975.58
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