a) Agnes wishes to borrow Ksh 10,000 for two years and to repay the loan plus interest at the end of the two years. Bank A charges interest on loans weekly at the nominal rate of 11% per annum. Bank B charges interest for the first six months with an annual effective rate of 3% and for the remaining period with an annual effective rate of 15%. In each case calculate the amount payable at the end of the two year period. Which bank should Agnes choose for the loan? (10 marks
b) Enos on retirement from a provident fund retains Ksh 600,000 and in addition purchases an annuity that pays 144 monthly payments of Ksh 12,000 each, the first due at the end of 5 years. If interest accrues at 12%. Compute the total amount received from the provident fund.
(10 marks)
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