Bnak offers a loan of 10% per annum compounded semi annually and the effective annual rate is 10.25%
Example: Customer A
Customer A negotiated a $10,000 loan to be repaid monthly over 5 years.
How much is the monthly installment (payment)?
P = Po(1+r)^n.
Po = $10,000.
r = 0.1/2 = 0.05 = Semi-annual % rate expressed as a decimal.
n = 2Comp./yr. * 5yrs. = 10 Compounding periods. P = ?.
t = 5 yrs. * 12mo/yr. = 60 mo.
Monthly Payments = P/t.
]