A dressmaker purchases cloth and supplies every six months to benefit from bulk purchasing resulting in a six -month business cycle. For the purpose she borrows LKR 10,000 from a micro finance institution at 48% of annual interest rate. Consider the above loan to be repaid in 6 equal monthly installments, calculated on declining balances a)Calculate the installments amount per period. b. If the customer needs to pay 3% commission on credit disbursement, what is the total fee and interest of the loan? c. Show the amortization schedule.
d. Calculate the effective interest rate.