Question

dollar) 9 A loan of Rp. 25.000.000 is to be financed to assist a person's college education. Based upon monthly compounding for 24 months, the end-of-the-month equal payment is quoted as Rp. 150.000. What nominal interest rate is being charged'! 10. You obtained a loan of Rp.75.000.000 to finance your home improvement project. Based on monthly compounding over 24 months, the end-of-the-month equal payment was figured to be Rp. 3500.000. What is the APR used for this loan?

for number 9 is 1,500,000

Answer 1

Answer to Q#9 (First question in the list): # of monthly payments, NPER 24 Monthly payment amount, PMT Rp 1,500,000 Initial loan amount, PV Rp 25,000,000 Loan balance at the end, FV Rp O [Because all will be paid off over loan's tenure] Monthly payment type, TYPE 0 = 0 if occurs at the end of each month; 1 if occurs at the beginning of each month Monthly interest rate 3.1491% --> (a) [Ref: NOTE] Number of months in a year 12 --> (b) Nominal interest rate (Annual) 37.79% --> (a) x (b) NOTE: 24 Monthly Interest Rate is calculated using EXCEL FUNCTION RATE(nper,pmt,pv,fv,type) where nper=24; pmt=-1500000; pv=-25000000; fv=0; Here, pmt is negative as it denotes cash outflow; pv is negative as it denotes cash inflows; type=0 as payments are made at the end of each month only. Α D 1 # of monthly payments, NPER 2 Monthly payment amount, PMT Rp 1,500,000 3 Initial loan amount, PV Rp 25,000,000 4 Loan balance at the end, FV Rp 0 [Because all will be paid off over loan's tenure) 5 Monthly payment type, TYPE 0 = 0 if occurs at the end of each month; 1 if occurs at the beginning of each month 6 Monthly interest rate =RATE(B1,-B2,B3,B4,B5) --> (a) [Ref: NOTE] 7 Number of months in a year 12 --> (b) 8 Nominal interest rate (Annual) =B6*B7 --> (a) (b)