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Amortizing a loan, Corporate Finance
Suppose you take out a loan of $10,000, repayable by five equal annual instalments. The interest rate is 10% per year.
(a) How much do you need to repay per year to the nearest cent if payments are due : (i) at the beginning of each year (ii) at the end of each year?
(b) Which loan in part (a) is preferable, (i) or (ii)? Explain your answer.
Posted Date: 3/25/2013 2:13:42 AM | Location : Australia
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