Question

Kevin borrows 60 000 USD from a bank at a nominal interest rate of 5% per annum compounded half yearly. He aims to pay
back the loan in a single payment after 5 years.
(a) Write down the number of times interest will be charged on
his loan during the five-year period.
(b) Find how much he will have to pay back in five years' time.
Give your answer to the nearest thousand dollars.
(c) If he fails to pay back the loan, find after how many years its
value will exceed $75 000.

Answer 1

Answer:

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