Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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PLEASE WRITE THE SOLUTIONS ON PAPER, EXPLAINING THE ENTIRE PROCESS, THE ONLY POSSIBLE SOLUTIONS ARE THE STIPULATED ONES

---> C10
---> 110 = £496.72 --
USING FORMULAS, NO TABLES, CORRECT ANSWERS ARE FOR A) L0 = £45,867 AND FOR B) L9 = £33,115 --
= £1,920 - 110 = £1,423.27; L10 = £31,691.77
A loan is repayable by decreasing quarterly instalments made in arrears for 8 years.
The payment made at the end of the first quarter year is £2,100 and subsequent
payments decrease by £20 each quarter. The instalments were calculated using a
nominal rate of interest of 6% per annum convertible quarterly.
(a) Calculate the original amount of the loan in whole pounds.
(b) Calculate the amount of interest and capital components in the 10th instalment.
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Transcribed Image Text:---> C10 ---> 110 = £496.72 -- USING FORMULAS, NO TABLES, CORRECT ANSWERS ARE FOR A) L0 = £45,867 AND FOR B) L9 = £33,115 -- = £1,920 - 110 = £1,423.27; L10 = £31,691.77 A loan is repayable by decreasing quarterly instalments made in arrears for 8 years. The payment made at the end of the first quarter year is £2,100 and subsequent payments decrease by £20 each quarter. The instalments were calculated using a nominal rate of interest of 6% per annum convertible quarterly. (a) Calculate the original amount of the loan in whole pounds. (b) Calculate the amount of interest and capital components in the 10th instalment.
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