A machine is bought with a loan which must be repaid in 20 equal half-yearly instalments of R6 500. The first instalment is payable four years after the loan has been negotiated. What is the price of the machine if compound interest is added every half year at 14% p.a. on the outstanding amount?

A machine is bought with a loan which must be repaid in 20 equal half-yearly instalments of R6 500. The first instalment is payable four years after the loan has been negotiated. What is the price of the machine if compound interest is added every half year at 14% p.a. on the outstanding amount?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 19P

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Calculating the Return On A Loan

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A machine is bought with a loan which must be repaid in 20 equal half-yearly instalments of
R6 500. The first instalment is payable four years after the loan has been negotiated. What is the
price of the machine if compound interest is added every half year at 14% p.a. on the outstanding
amount?

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