(SOLVED) A loan should be fully repaid in 60 monthly instalments of $5 million.
Discipline: Finance
Type of Paper: Question-Answer
Academic Level: Undergrad. (yrs 1-2)
Paper Format: APA
Question
Question :
1. A loan should be fully repaid in 60 monthly installments of $5 million. If the loan is $250 million, what will be the total interest payment for the first year?
2. A loan should be fully repaid in 60 monthly installments of $5 million. If the loan is $250 million, what is the effective interest rate (j12) of the loan?
3. A loan should be fully repaid in 60 monthly instalments of $5 million. If the loan is $250 million, what will be the principal repayment during the first year?
Please provide and explain how to calculate and get the answer exactly like this, using excel!
1)
The first step is to find the interest rate of the loan using the RATE function in excel.
Interest rate per month = 0.62 %
