Hi guys, pls help with this finace question.

1 aminas parents have estimated that her university education will cost 120000 naira when she enrols 7 yrs from today.at what rate of interest would they invest 20000 to raise the expected cost of her education.

2 ama has just arranged for a 1 millionnaira loan with a commercial bank to finance the purchase of a plot of land . the loan attracts an interest of 15% per annum and calls for monthly payments over the next 10yrs.in addition, the loan agreement stipulates a 4-yr ballon payment.how much will the ballon payment be?

thanks.

The first question says that the payment to be made in future is 120,000; at wat rate of interest will 20,000 accumulate to be able to meet the needs of amina which is 120,000. the term is 7 years.

Solution

20,000(1+i)^7 = 120,000

i which is the rate of interest will give you 29.2%(approximately) Hope it answers ur question

For the second question contact three.eyes27@yahoo.com