Hi, I'm doing a question;
For a reducing balance loan of 180000 at 9% over 12 yrs, with fortnightly repayments of 932.75, find;
a. Total interest payable
b. The equivalent flat rate of interest annually
I was wondering if theres a method to calculate total interest payable (for a) without manually drawing out the whole table? In this case, you would have to draw 312 rows (12x26 fortnights) and I swear that's not the most efficient way, but the textbook doesnt mention anything otherwise.
And I'm just at a complete loss as to how you would do b
Hi okay this is how i would do the question *= multiply /=divide
a) 932.75*26=24251.5 that is per year as there is 26 fortnights now for 12 years you do 24251.5*12=291018
now 291018-180000=111018 which is the total interest payable
b) okay so for this question begin with the simple interest formula which is I=PRN
now to find I( intrest ) you make it the subject of the formula which is r= I/P*N
now the interest is total repayable - the principle which is 291018-180000= 111018 therefore the answer will be
111018/ 180000(the principle)*12 years = answer* 100
which is 5.14% to 2dp
if you dont understand or need anything feel free to ask
thanks