Answer to Question #213500 in Finance for Kalonji

Question

Mr mdlalose starts his own business and takes out a loan of R450 000

He repays the loan in four equal annual installments starting one year after the loan was granted

Calculate his annual repayments if the interest charged on the outstanding balance is 10% p.a. compounded annually

Answer 1

Given information

Loan amount = R450,000

Time Period = 4 years 

Interest rate =10% p.a compounded annually

Here,

It can be calculated as follows:

So the Annual Repayment Payment of Mr mdlalose would be R1,41,961.86