(4) (a) Maturity Value of this loan = $500 + $500*9%*60/365
= $500 + $7.4
= $507.4
(b) To calculate simple interest discount,
Amount = Principal*Time*Rate
$507.4 = $500*60/365*Rate
Rate = 6.17%
(5) (a) Monthly payment after 5 years
Therefore, Monthly payment for initial 5 years = $1752.18
(b)
Therefore, the outstanding principal after 5 years is $302,121.41
(5)(c) Now, the payment is to be made every second week
No of weeks in a year = 52
No of payments in a year = 52/2 = 24 times
Therefore, new payment after 5 year at 4.2 % = $930.88.
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