Answer to Question #295176 in Economics for john k

Question

A. Discuss any key considerations that you may pay attention to when making

investment decisions for financial management.

B. Hankede is interested in determining the time period for his K3,600 to accumulate

to K4,000 if saved today. How long will it take for Hankede to achieve his objective

with semiannual compound rate of interest of 6% per annum?

C. A company has borrowed K800,000 from a bank. The loan is to be repaid by level

instalments, payable annually in arrears for 10 years from the date the loan is

made. The annual repayments are based on an effective rate of interest of 8% per

annum.

I. Calculate the amount of the level annual payment which will be paid over

the 10-year term.

II. Construct an amortization schedule showing the capital and interest

components over the first four years of the loan.

Answer 1

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