Question

6) Mrs. Hesabu has taken a loan of sh. 400,000 from Sweet

waters Ltd. She expects to liquidate the loan in 20 years time. The
discounting rate is 12% Compute the amount she has to pay each
year in order to liquidate the loan (6 marks)​

Answer 1

Explanation:

If she was given a discount of 12% then the amount to be paid becomes I=P×R×T/100

I=400000×12×20/100

I=960000

Amount to be paid =I +P= 960000+400000=1360000

To liquidate this amount in 20 years therefore will be A÷20

1360000÷20

=68000 yearly