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    elhing's Avatar
    elhing Posts: 1, Reputation: 1
    New Member
     
    #1

    Apr 4, 2009, 11:32 PM
    Corporate Finance
    I am practising for my midsem exam tomorrow and having problems with one question which says to find out the years of the loan taken out.

    Loan - 100,000
    Interest Rate - 12% compounded quarterly
    Quarterly repayments are - $5904.74

    I have tried doing the problem but I am confused as to which formula to use..

    PLEASE HELP...
    ROLCAM's Avatar
    ROLCAM Posts: 1,420, Reputation: 23
    Ultra Member
     
    #2

    Apr 5, 2009, 04:23 AM

    The answer is 6 years.

    Loan - 100,000
    Interest Rate - 12% compounded quarterly
    Quarterly repayments are - $5904.74

    1 100,000.00 103,000.00 5,904.74 97,095.26
    2 97,095.26 100,008.12 5,904.74 94,103.38
    3 94,103.38 96,926.48 5,904.74 91,021.74
    4 91,021.74 93,752.39 5,904.74 87,847.65
    5 87,847.65 90,483.08 5,904.74 84,578.34
    6 84,578.34 87,115.69 5,904.74 81,210.95
    7 81,210.95 83,647.28 5,904.74 77,742.54
    8 77,742.54 80,074.82 5,904.74 74,170.08
    9 74,170.08 76,395.18 5,904.74 70,490.44
    10 70,490.44 72,605.15 5,904.74 66,700.41
    11 66,700.41 68,701.42 5,904.74 62,796.68
    12 62,796.68 64,680.58 5,904.74 58,775.84
    13 58,775.84 60,539.12 5,904.74 54,634.38
    14 54,634.38 56,273.41 5,904.74 50,368.67
    15 50,368.67 51,879.73 5,904.74 45,974.99
    16 45,974.99 47,354.24 5,904.74 41,449.50
    17 41,449.50 42,692.99 5,904.74 36,788.25
    18 36,788.25 37,891.89 5,904.74 31,987.15
    19 31,987.15 32,946.77 5,904.74 27,042.03
    20 27,042.03 27,853.29 5,904.74 21,948.55
    21 21,948.55 22,607.00 5,904.74 16,702.26
    22 16,702.26 17,203.33 5,904.74 11,298.59
    23 11,298.59 11,637.55 5,904.74 5,732.81
    24 5,732.81 5,904.79 5,904.74 0.05

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