Question

Land Hope Hospital has hired you to advise them on a loan they need to take out. Prepare a list of questions you will need them to answer in order to prepare a amortization schedule.

Answer 1

The list of questions is as follows:

1. What is the purpose of the loan and how will they fund the principal and interest payments? The answer to these questions will determine the type of loan, and applicable interest rate
2. What is the credit rating of Land Hope Hospital as that will affect the loan interest rate?
3. What is the Loan Amount?
4. What is the Drawdown period or the period during which the loan will be drawn?
5. What is the Loan Drawdown schedule, i.e., what amounts will Land Hope Hospital withdraw and on what dates?
6. What is the Moratorium period or period before which Principal repayment would start?
7. What is the Loan Repayment Period or period during which entire loan amount would be repaid to the Lender?
8. What would be the Loan Repayment Schedule or what amounts (principal) would be repaid on what dates?