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Exercise 2

To start a business, the person needs RM300,000 and has RM10,000 in savings. Their parents agreed to give RM40,000. They plan to apply for a RM250,000 loan from Bongkok Bank over 15 years at 5% interest compounded for the first 3 years and charged as equal payments starting in year 4. The yearly repayment is calculated to be RM32,652.38.

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39 views2 pages

Exercise 2

To start a business, the person needs RM300,000 and has RM10,000 in savings. Their parents agreed to give RM40,000. They plan to apply for a RM250,000 loan from Bongkok Bank over 15 years at 5% interest compounded for the first 3 years and charged as equal payments starting in year 4. The yearly repayment is calculated to be RM32,652.38.

Uploaded by

Cun Zi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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To start a business, you need RM300,000.

You are going to use your saving of RM10,000 and your parents has agreed to give RM40
You intend to apply for a loan from a bank for the rest of the money. Bongkok Bank agrees to lend the money with the following te
i. Interest rate of 5% per annum on loan balance.
ii. Payback period of 15 years.
iii. Payment to start from year four (4).
iv. Compound interest rate are charged for year 1 until 3

Calculate the yearly repayment according to Equal Payment Plan.


money need to lend 300000 - 10000 - 40000 = 250000
289406.3 (A/P,5%,12) = 32652.38

Year Principal Interest Payment Balance


0 250000
1 12500 262500
2 13125 275625
3 13781.25 289406.25
4 18182.0675 14470.3125 32652.38 271224.1825
5 19091.17088 13561.20913 32652.38 252133.0116
6 20045.72942 12606.65058 32652.38 232087.2822
7 21048.01589 11604.36411 32652.38 211039.2663
8 22100.41668 10551.96332 32652.38 188938.8496
9 23205.43752 9446.942482 32652.38 165733.4121
10 24365.70939 8286.670606 32652.38 141367.7027
11 25583.99486 7068.385136 32652.38 115783.7079
12 26863.19461 5789.185393 32652.38 88920.51325
13 28206.35434 4446.025662 32652.38 60714.15891
14 29616.67205 3035.707946 32652.38 31097.48686
15 31097.50566 1554.874343 32652.38 0
Total 289406.2688
000 and your parents has agreed to give RM40,000.
grees to lend the money with the following terms:

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