Question

You are saving money to buy a house in 12 years, the estimated property price is $550,000. You aim to save sufficient funds to contribute to the 10% initial deposit, you parents have agreed to help you with 10% of the property cost, and you will arrange a mortgage to cover the remaining 80% of property cost. The nominal interest rate for your savings account is 12% per annum compounded quarterly. The nominal interest rate charged by the mortgage provider is 12% per annum compounded monthly.

a) Calculate the required size of week-end-saving instalments, so that you will have sufficient funds to pay the initial deposit for the property.

Answer 1

Converting savings account APR to weekly.

Particulars	Amount
Given APR	12.00%
Given compounding frequency per year	4
Effective annual rate	12.551%
(1+ 0.12/4)^4 -1
Required compounding frequency per year	52
Req period effective rate	0.2276%
(1+ 0.12550881)^1/52 -1
Required APR	11.83697%
0.00227634*52

Payment required	=	FV*r /[(1+r)^n -1]
Future value	FV	55,000.00
Rate per period	r
Annual interest		11.836970%
Number of payments per year		52
Interest rate per period		0.1183697/52=
Interest rate per period		0.228%
Number of periods	n
Number of years		12
Periods per year		52
number of periods		624
Period payment	=	55000*0.002276/ [(1+0.002276)^624 -1]
	=	39.97

Weekly payment is 39.97

please rate.