Neco 2025 Commerce Question 6

An entrepreneur obtains a loan of \(\text{₦}500,000\) from a bank at a nominal rate of 12% per annum compounded semi‑annually. A processing fee of 2% of the loan amount is charged at the start. After exactly 2 years the loan is refinanced with a new loan at 10% per annum compounded quarterly. At the time of refinancing a pre‑payment penalty of 1% of the outstanding principal is imposed. The new loan is taken for a further 1 year. Determine the total amount of interest and charges (processing fee, pre‑payment penalty, and interest on both loans) that the entrepreneur will have paid over the whole borrowing period. Give your answer in naira to two decimal places.