Question
In: Accounting
Interest rate/ compound interest Q1: Samantha borrowed $10,000 at a prime of 2% on March 29....
Interest rate/ compound interest
Q1: Samantha borrowed $10,000 at a prime of 2% on March 29. She agreed to payments of $2,000 on the first day of each month beginning May 1. The prime rate was 4% when Samantha took out the loan. Construct a full repayment schedule showing details of the allocation of each payment to interest and principal. What is the final payment?
Q2: Mr. Barrow have loan payments of $400 due 95 days ago and $700 due today are to be repaid by a payment of $600 thirty days from today and the balance in 125 days. If money is worth 6% and the agreed focal date is 125 days from today, how much is Mr. Barrow’s final payment? ( 10 marks)
Solutions
Expert Solution
1.
Note - There was a typo in Q the first line should read as " Samantha borrowed $10,000 at a prime plus 2% on March 29". Thus applicable Interest rate is Prime rate +4% = 2%+4% =6%. The answer is solved based on this correction
Formula used
2
For any clarification, please comment. Kindly Up Vote
ekkarill92 answered 2 years agoRelated Solutions
Samantha borrowed $10,000 at prime + 2% on March 29. She agreed to payments of $2,000...
Samantha borrowed $10,000 at prime + 2% on March 29. She agreed
to payments of $2,000 on the first day of each month beginning May
1. The prime rate was 4% when Samantha took out the loan. Construct
a full repayment schedule showing details of the allocation of each
payment to interest and principal. What is the final payment?
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