(a) Calculate the amount of interest charged each month. (b) How much money will the company owe after 1 year? 13 of 13 Furniture Land change their interest only loan to a reducing balance loan and...

Extracted text: (a) Calculate the amount of interest charged each month. (b) How much money will the company owe after 1 year? 13 of 13 Furniture Land change their interest only loan to a reducing balance loan and increase their monthly payment to $1700. Their interest rate of 4.5% p.a. compounding monthly stays the same. (c) How long, to the nearest year, will it take to pay off the loan? (d) What is the amount outstanding after 5 years? Write your answer to 2 decimal places. (e) If the interest rate increases to 9% p.a., how much money will they have to pay each month to pay off the loan in 5 years? (f) What would be the total cost of the loan if Furniture Land continued L paying this monthly payment for 5 full years?


Extracted text: Furniture Land are extending one of their warehouses and will borrow $120,000 for building costs. They decide to take out an interest only loan that charges a rate of 4.5% p.a. compounding monthly. Show your working for this question. KOOK