A loan is to be repaid by an annuity payable annually in arrear. The annuity starts at a rate of £300 per annum and increases each year by £30 per annum. The annuity is to be paid for 20 years.
Repayments are calculated using a rate of interest of 7% per annum effective.
Calculate:
(i) The amount of the loan.
(ii) The capital outstanding immediately after the 5th payment has been made.
(iii) The capital and interest components of the final payment.