Page 70 - F2 Integrated Workbook STUDENT 2019
P. 70
Chapter 3
Example 3.4
On 1 January 20X5, a 5% loan note is issued for $5,000. The loan is
redeemable after three years at a premium of $487, giving an effective rate of
interest of 8%. Interest is paid annually in arrears.
Required:
Show how the value of the loan note changes over its life.
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