Question

A loan of 50,000 euros is to be repaid in equal quarterly installments in five years. If the annual interest rate is 7.5%, find out
a) the amount of the installment,
b) the total amount of the interest paid,
c) interest paid quarterly,
d) the first year of installments.

Answer 1

Part A:

Equal Quarter Instalment = Loan / PVAF (r%, n)

r = Int rate per quarter

n is no. of quarters

Particulars	Amount
Loan Amount	€   50,000.00
Int Rate per Quarter	1.8750%
No. of periods	20
EQI = Loan Amount / PVAF (r%, n)
Where r is Int rate per Quarter & n is no. of Quarters
= Euro 50,000 / PVAF (0.01875 , 20)
= Euro 50,000 / 16.5504
= Euro 3021.08

Part B:

Total Int Paid = [ EQI * Instalments ] - Loan

= [ Euro 3021.08 * 20 ] - Euro 50,000

= Euro 60,421.60 - Euro 50,000

= Euro 10,421.60

Part C:

Period	Opening Bal	EMI	Int	Principal Repay	Closing Outstanding
1	50,000.00	3,021.08	937.50	2,083.58	47,916.42
2	47,916.42	3,021.08	898.43	2,122.64	45,793.78
3	45,793.78	3,021.08	858.63	2,162.44	43,631.34
4	43,631.34	3,021.08	818.09	2,202.99	41,428.35
5	41,428.35	3,021.08	776.78	2,244.29	39,184.06
6	39,184.06	3,021.08	734.70	2,286.37	36,897.69
7	36,897.69	3,021.08	691.83	2,329.24	34,568.44
8	34,568.44	3,021.08	648.16	2,372.92	32,195.53
9	32,195.53	3,021.08	603.67	2,417.41	29,778.12
10	29,778.12	3,021.08	558.34	2,462.74	27,315.38
11	27,315.38	3,021.08	512.16	2,508.91	24,806.47
12	24,806.47	3,021.08	465.12	2,555.95	22,250.52
13	22,250.52	3,021.08	417.20	2,603.88	19,646.64
14	19,646.64	3,021.08	368.37	2,652.70	16,993.94
15	16,993.94	3,021.08	318.64	2,702.44	14,291.50
16	14,291.50	3,021.08	267.97	2,753.11	11,538.39
17	11,538.39	3,021.08	216.34	2,804.73	8,733.66
18	8,733.66	3,021.08	163.76	2,857.32	5,876.34
19	5,876.34	3,021.08	110.18	2,910.89	2,965.45
20	2,965.45	3,021.08	55.63	2,965.45	0.00

Part D:

Period	Opening Bal	EMI	Int	Principal Repay	Closing Outstanding
1	50,000.00	3,021.08	937.50	2,083.58	47,916.42
2	47,916.42	3,021.08	898.43	2,122.64	45,793.78
3	45,793.78	3,021.08	858.63	2,162.44	43,631.34
4	43,631.34	3,021.08	818.09	2,202.99	41,428.35
5	41,428.35	3,021.08	776.78	2,244.29	39,184.06
6	39,184.06	3,021.08	734.70	2,286.37	36,897.69
7	36,897.69	3,021.08	691.83	2,329.24	34,568.44
8	34,568.44	3,021.08	648.16	2,372.92	32,195.53
9	32,195.53	3,021.08	603.67	2,417.41	29,778.12
10	29,778.12	3,021.08	558.34	2,462.74	27,315.38
11	27,315.38	3,021.08	512.16	2,508.91	24,806.47
12	24,806.47	3,021.08	465.12	2,555.95	22,250.52
13	22,250.52	3,021.08	417.20	2,603.88	19,646.64
14	19,646.64	3,021.08	368.37	2,652.70	16,993.94
15	16,993.94	3,021.08	318.64	0 0 Add a comment Know the answer? Your Answer: Post as a guest Your Name: What's your source? Earn Coins Coins can be redeemed for fabulous gifts. Log In Sign Up Post as anonymous Post Your Answer Not the answer you're looking for? Ask your own homework help question Similar Questions A loan is repaid in ten equal annual installments with the first installment paid one year... A loan is repaid in ten equal annual installments with the first installment paid one year after the loan is made. The effective annual interest rate is 4%. The total amount of principal repaid in the fifth, sixth, and seventh payments combined is $6,083. What is the total amount of interest paid in the second, third, and fourth payments combined? Less than $2,000 At least $2,000, but less than $2,020 At least $2,020, but less than $2,040 At least $2,040,... A loan of $ 10000 is to be repaid in 30 equal monthly installments with the... 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