TheBelle Company is known for its handbag designs. The company is expanding and have decided
to open a new branch in Kuantan which will cost RM 500000. The company is considering taking
a 20 years loan from a local bank. The company received two different offers, one from Bank A
and the other from Bank B. You have been approached to advise the company of the financing
options that have been identified to facilitate this expansion. You need to perform the necessary
quantitative analyses (as requested below) and prepare a report for TheBelle Company, where
you describe your findings and make appropriate recommendations.
a) Bank A charges an interest of 9% per annum compounded quarterly.
i. Calculate the quarterly payments that must be made by the company on this loan (to 2
decimal places)..
(4m)