Sue and Sam borrowed $45,000 to buy a home unit. The bank loan is repayable...
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Sue and Sam borrowed $45,000 to buy a home unit. The bank loan is repayable in equal half-yearly instalments over 25 years at an interest rate of 12% per annum. Two and a half year's later the interest rate has risen to 14%. As they cannot increase their repayments, Sam asks the bank to extend the loan period. The bank refuses their request. Required:
i. Calculate the instalment payments for the loan.
ii. Calculate the amount of the loan still outstanding when the interest rate rises.
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