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Mathew has a 10-year personal loan with the bank. He currently makes equal half-yearly repayments...

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Accounting

Mathew has a 10-year personal loan with the bank. He currently makes equal half-yearly repayments at the end of each 6 months at an interest rate of 8% p.a. compounded half-yearly. Which of the following may increase the total cost of the loan? (There may be more than one correct answer. You will lose marks by choosing a wrong answer. The minimum mark for the question is zero.)

Select one or more:

a. To make year-end repayments starting in one years time at an equivalent interest rate.

b. None of the options increases the total cost of the loan.

c. To make repayments at the beginning of each 6 months starting on the borrowing date.

d. To repay the loan faster and pay off the loan in 7 years.

e. To renegotiate the interest rate to 8% p.a. effective.

f. To ask for an interest-only period for the first 3 years of the loan.

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