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Consider a loan that is repayable by regularly increasing monthly instalments over a 8-year period....

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Finance

image Consider a loan that is repayable by regularly increasing monthly instalments over a 8-year period. Thus, the instalment at the end of the first month is set to \( 3630 \) and subsequent payments increase by an amount of \( 25 \) each month. Assuming that the rate of interest is \4.1 per annum effective for the entire term of the contract, calculate, to 2 decimal places, the following: a) The initial amount of loan that was borrowed: \( \mathrm{E} \) ; [3] b) The total amount of loan repaid up until the start of the \( 3^{\text {th }} \) year: \( \mathrm{E} \) ; [3] Hint: This is the opposite of the loan outstanding. c) The amount of interest component in the \( 25^{\text {th }} \) instalment: \( \mathrm{E} \) . [2]

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