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Mr Smith is struggling to repay his loan of K200,000 withpayments of K4,279 made monthly in arrears for 5 years. (i) Findthe amount of the level annual repayment. (ii) Hence, otherwise,calculate the APR of Mr Smiths loan, After exactly one year, a loancompany oers to `help' Mr Smith by restructuring his loan with newmonthly payments of K2,744.90 made in arrears. (iii) Assuming thecompany charges the same APR as Mr Smiths original loan, calculatethe term of the new loan. (iv) Calculate how much more interest intotal Mr Banda will pay on his restruc- tured loan than on hisoriginal loan.
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