Department of Chemical and Process Engineering

University of Moratuwa
MN 4022-Engineering Economics

Individual Assignment

Name: R.M.N.A Chathuranga

Index: 180099H

Submission Date: 05/12/2022

Contents
Bank selection ............................................................................................................................................... 3
Car selection.................................................................................................................................................. 4
Loan amortization plans................................................................................................................................ 5
Choosing a most preferable loan repayment option .................................................................................... 6
References .................................................................................................................................................... 6
Bank selection
1. Sampath Bank
Repayment methods: Equated payment scheme

[1]

2. Commercial Bank
Repayment methods: Equated payment scheme

[2]
3. Seylan Bank
Repayment methods: Equated payment scheme
[3]

Car selection
Samapath Bank Commercial Bank Seylan bank
Salary (per month) 240,000 240,000 240,000
Loan Repayment (per 80,000 80,000 80,000
month)
Interest rate (per 30% 33% 26.5%
year)
Repayment 15 15 15
period(years)
Number of monthly 180 180 180
installments
Present value (Rs) 3,162,428.87 2,887,060.23 3,551,603.60

Considering the present values of loans of each 3 banks,

Loan amortization plans commercial bank offers the loan with a least present value of Rs.
2,887,060.23. So, the maximum value of a car to be selected is less than Rs. 2,887,060.23
 Brand Model Engine YOM Milage Gear Price (Rs)
Capacity (km)
Honda Ek3 1500 1997 200000 Auto 2,800,000
Ferio2000
Toyota starlet 1300 1997 125000 Manual 2,750,000
Suzuki alto 800 2015 36,943 Manual 2,650,000
Datsun Redi Go 800 2016 52,000 Manual 2,675,000

Datsun Redi go has been selected as preferred choice since it is newer, low milage, good fuel
consumption.

Loan amortization plans

A loan amortization plan has been created for each bank

• Sampath Bank- Equated payment scheme
• Commercial Bank- Equated payment scheme
• Seylan Bank- Equated payment scheme
Choosing a most preferable loan repayment option

option Present Value Chosen Loan Total payment Total interest Maximum
amount monthly
payment
Sampath Bank- 3,162,428.87 28,000,000 12,749,693.86 9,949,693.872 70,831.633
Equated
payment
scheme

Commercial 2,887,060.23 28,000,000 13,965,763.35 11,165,763.353 77,587.574

Bank- Equated
payment
scheme

Seylan Bank- 3,551,603.60 28,000,000 11,550,476.16 8,750,475.99 64,169.312

Equated
payment
scheme

Seylan Bank- Equated payment scheme can be selected as most preferable loan repayment
option since its total payment is least among others.

References

[1] "Loans - Personal - Sampath Bank PLC," Sampath Bank PLC, [Online]. Available:
https://www.sampath.lk/en/interest-rates-local. [Accessed 06 12 2022].

[2] "Rates & Tariffs," Commercial Bank Of Ceylon PLC, [Online]. Available:
https://www.combank.lk/rates-tariff#lending-rates. [Accessed 06 12 2022].

[3] "Personal Loan," Seylan Bank PLC, [Online]. Available: https://www.seylan.lk/personal-loans/seylan-

personal-loan. [Accessed 06 12 2022].