A company plans to borrow a R1200000 through a 5 year loan at 24% interest. If the loan is fully amortized, calculate the amount of interest that the company would have to pay annually
+118723 You know the initial amount and the end amount is 0
therefore it is a psesent value of an annuity question. It is an ordinary one because banks add the payments are made at the end of time periods (that is how banks work)
You haven't said how often the payments are made so I will assume yearly.
$$\boxed{A=R\times \frac{1-(1+i)^{-n}}{i}}$$
Actually on examination of the question it does not make a lot of sense.
I can work it out but it is not something you would ever bother with. Oh well not to worry.
n=5, A=1 200 000, n=5, i=0.24
You need to work out R which is your regular payment,
Mmm now it gets a bit obsure.
If you get that far maybe we can look at it together and work out what the question asker actually wants. 
You can work out total interest easily enough but each year a different amount of interest will be paid.
+118723 You know the initial amount and the end amount is 0
therefore it is a psesent value of an annuity question. It is an ordinary one because banks add the payments are made at the end of time periods (that is how banks work)
You haven't said how often the payments are made so I will assume yearly.
$$\boxed{A=R\times \frac{1-(1+i)^{-n}}{i}}$$
Actually on examination of the question it does not make a lot of sense.
I can work it out but it is not something you would ever bother with. Oh well not to worry.
n=5, A=1 200 000, n=5, i=0.24
You need to work out R which is your regular payment,
Mmm now it gets a bit obsure.
If you get that far maybe we can look at it together and work out what the question asker actually wants.
You can work out total interest easily enough but each year a different amount of interest will be paid.
