posted by Anonymous .
The Hypothetical Finance Ltd has structured a hire-purchase deal. The required to make a down
payment of 20 per cent of the investment cost. The hire-term is four years with quarterly payment
in advance. The flat rate of interest is 13 per cent. The finance company would charge a frontended
documentation and service fee and allow rebate for prompt payment @ 0.5 per cent and 1
per cent of investment outlay respectively.
Assuming after paying 24th installment, a hirer wishes the purchase option, what is the interest
rebate according to (i) actuarial method, (ii) rule of 78 method and, (iii) SLM?
(i) actuarial method, (ii) rule of 78 method and, (iii) SLM?