Jacqui has already saved $575,000 as a deposit for a new waterfront 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?

Solutions

Expert Solution

Step 1) Calculate the loan amount:

Loan amount = Total cost - money already collected

Loan amount = 3,500,000 - 575,000

Loan amount = 2,925,000

Step 2) Calculate the monthly payment:

We are given the following information:

Payment	PMT	To be calculated
Rate of interest	r	3.20%
Number of years	n	15.00
Monthly	frequency	12.00
Loan amount	PV	2925000.00

We need to solve the following equation to arrive at the required PMT

So the monthly payment is $20482.05

jeff jeffy answered 2 years ago

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