Benson borrowed $40 000 to buy his first car. The loan is to be repaid by monthly instalments over 7 years. Interest is to be at 12% p. compounded…

Benson borrowed $40 000 to buy his first car. The loan is to be repaid by monthly instalments over 7 years. Interest is to be at 12% p.a. compounded monthly.

(a) Calculate the size of the level monthly instalment.

(b) Calculate the loan outstanding after 3 years (i.e. immediate after the 36th monthly

instalment).

(c) Calculate the total principal repayments and total interest payments that have been made in the first 3 years (i.e. immediate after the 36th monthly instalment).

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