Jacqui has already saved $575,000 as a deposit for a newwaterfront villa in the Hamptons....

Jacqui has already saved $575,000 as a deposit for a new waterfront villa in the Hamptons. It will cost her a total of $3.5 million to purchase this property. She plans to borrow the rest from CityGroup over 15 years at a rate of 3.2% p.a. compounding monthly. What would be Jacqui's monthly repayments?

Expert Solution

Information provided:

Price of the villa= $3,500,000

Down payment = $575,000

Loan= Present value= $3,500,000 - $575,000 = $2,925,000

Time= 15 years*12= 180 months

Interest rate= 3.2%/12= 0.2667% per month

The monthly repayment is calculated by entering the below in a financial calculator:

PV= -2,925,000

N= 180

I/Y= 0.2667

Press the CPT key and PMT to compute the monthly repayment.

The value obtained is 20,482.06.

Therefore, the monthly repayment is $20,482.06.

jeff jeffy answered 2 years ago

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