Mr Sullivan Is Borrowing $2 Million to Expand His Business

question 50

Essay

Mr. Sullivan is borrowing $2 million to expand his business. The loan will be for 10 years at 12% on the declining balance, and will be repaid in equal quarterly instalments. What will the quarterly payments be? At the end of the first year, how much interest will Mr. Sullivan have paid? By how much will he have reduced the principal?

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Definitions:

Weekly Earnings

The amount of money an individual earns from work in a typical week.

Bus Drivers

Individuals who operate buses, transporting passengers between locations following a predetermined route.

Mean

The average of a set of numbers, calculated by dividing the sum of all values by the number of values.