Answer to Question #322503 in Financial Math for Busi

Question

Edwill just purchased a new home costing R1 107 900,00 by paying R120 000,00 cash on the purchase date,

and agreeing to make payments at the end of the following eight years for the remainder owed; the first

payment is due one year after the purchase date. The interest rate is 7,4% per annum, compounded yearly.

Considering the amortisation schedule, the percentage, rounded to two decimal places, of the total payments

made the first two years that will go toward repayment of interest, is

[1] 43,51%.

[2] 41,42%.

[3] 58,58%.

[4] 70,71%.