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b. A plc wants to borrow N200 million for five years with interest payable at six-monthly intervals. It can borrow from a bank at a floating rate of NIBOR plus 1% but wants to obtain a fixed rate for the full five-year period. A swap bank has indicated that it will be willing to receive a fixed rate of 8.5% in exchange for payments of six-month NIBOR.
Required:
Calculate the fixed interest six-monthly payment with the swap in place. (4 Marks)
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a. Dinpa Supermarket is considering acquiring a loan of GH₵300,000 from Abrempong Bank Ltd. The loan is payable in five equal annual installments at an interest rate of 25%. Dinpa Ltd has consulted you to determine their annual repayment amount and the interest thereon.
Required:
i. Prepare a repayment schedule for Dinpa indicating clearly the interest payment and the principal repayment. (8 marks)
ii. State THREE (3) advantages of a term loan over an overdraft facility. (3 marks)
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
b. A plc wants to borrow N200 million for five years with interest payable at six-monthly intervals. It can borrow from a bank at a floating rate of NIBOR plus 1% but wants to obtain a fixed rate for the full five-year period. A swap bank has indicated that it will be willing to receive a fixed rate of 8.5% in exchange for payments of six-month NIBOR.
Required:
Calculate the fixed interest six-monthly payment with the swap in place. (4 Marks)
Find Related Questions by Tags, levels, etc.
a. Dinpa Supermarket is considering acquiring a loan of GH₵300,000 from Abrempong Bank Ltd. The loan is payable in five equal annual installments at an interest rate of 25%. Dinpa Ltd has consulted you to determine their annual repayment amount and the interest thereon.
Required:
i. Prepare a repayment schedule for Dinpa indicating clearly the interest payment and the principal repayment. (8 marks)
ii. State THREE (3) advantages of a term loan over an overdraft facility. (3 marks)
Find Related Questions by Tags, levels, etc.
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