The loan factor that would be used for the calculation is; 12.84
Loan factors in Compound interest
According to the question;
- We are required to determine the loan factor that would be used for the calculation.
The loan factor to be used to calculate the amount to be paid is given from compound interest formula as;
Loan factor = (1 + 0.1075)²⁵
Hence;
Loan factor = (1.1075)²⁵
Loan factor = 12.84.
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