The Suduko family are buying a new 4 bedroom house in a country town and will...

The Suduko family are buying a new 4 bedroom house in a country town and will borrow $600 000 from a bank at a rate of 8.0 per cent per annum compounded monthly for 25 years.

REQUIRED:

(i) Calculate the monthly loan repayment.
(ii) Calculate the principle and interest components of the 48^th repayment

(4 + 6 = 10 marks)

Expert Solution

(i)	Monthly Loan repayment	$ 4,630.90

Working:

	Monthly Loan repayment	=-pmt(rate,nper,pv,fv)
		$ 4,630.90

	Where,
	rate	=	8.0%/12	=	0.006666667
	nper	=	25*12	=	300
	pv	=			$ 6,00,000
	fv	=			0

(ii)		48th repayment
	Principal	$ 862.16
	Interest	$ 3,768.74


Working:
	Loan Value at the end of 47th repayment	=pv(rate,nper,pmt,fv)
		$ 5,65,311.15

	Where,
	rate	=	8.0%/12	=	0.006666667
	nper	=	300-47	=	253
	pmt			=	$ -4,630.90
	fv			=	0


	Interest in 48th payment	=	Loan Value at the end of 47th repayment	*	Monthly Interest rate
		=	$ 5,65,311.15	*	0.006666667
		=	$ 3,768.74

	Principal repaid	=	Monthly Payment	-	Interest Paid
		=	$ 4,630.90	-	$ 3,768.74
		=	$ 862.16

jeff jeffy answered 1 year ago

The Jones family is buying a new house at the price of $165,000. They will finance...

The Jones family is buying a new house at the price of $165,000. They will finance it with a twenty-year mortgage that has an interest rate of 8%. (a)Assuming that the family can make a $39,000 down payment, what will their monthly mortgage payment be? (b)If the family could increase the down payment by $10,000,then how much would their monthly mortgage payment be? (c)In total, how much money can the family save by making the larger down payment

The Harris family is buying a new 3,500-square-foot house in Muncie, Indiana, and will borrow $263,700...

The Harris family is buying a new 3,500-square-foot house in Muncie, Indiana, and will borrow $263,700 from Bank One at a rate of 5.420 percent for 15 years. What will be their monthly loan payment?

A house cleaning service claims that it can clean a four bedroom house in less than...

A house cleaning service claims that it can clean a four bedroom house in less than 2 hours. A sample of n = 16 houses is taken and the sample mean is found to be 1.97 hours and the sample standard deviation is found to be 0.1 hours. Using a 0.05 level of significance what is the correct conclusion? There is not enough evidence to conclude that the mean time is less than 2 hours. There is enough evidence to...

Suppose you are interested in buying a new Lincoln Navigator or Town Car. You are standing...

Suppose you are interested in buying a new Lincoln Navigator or Town Car. You are standing on the sales lot looking at a model with different options. The list price is on the vehicle. As a salesperson approaches, you wonder what the dealer invoice price is for this model with its options. The following data are based on a random selection of these cars of different models and options. Let y be the dealer invoice (in thousands of dollars) for...

The average cost of a one-bedroom apartment in a town is $650 per month. What is...

The average cost of a one-bedroom apartment in a town is $650 per month. What is the probability of randomly selecting a sample of 50 one-bedroom apartments in this town and getting a sample mean of less than $630 if the population standard deviation is $100? (Round the values of z to 2 decimal places. Round your answer to 4 decimal places.)

The Applegate family is planning to purchase a house. The house they are interested in is...

The Applegate family is planning to purchase a house. The house they are interested in is listed for $250,000. The current 30-years Mortgage rate is 5.3% (APR). Your task is to find out what will happen to their monthly payment if they put down 10%, 20%, and 30%. Additionally, they would like to see what happens when they choose a 15-year mortgage with 4.2% APR. Create an Excel spreadsheet to answer the questions above. You will be using Data Tables...

You are doing some research on the cost of one-bedroom apartments in town. Based on prices...

You are doing some research on the cost of one-bedroom apartments in town. Based on prices from previous years, a real estate agent gives you the information that σ is approximately $55 and μ is approximately $675per month. Assume that price follows roughly a normal distribution. You have randomly selected 25 apartments for which the price was published. The average price for these apartments is ?̅=695. You are to test if μ is less than 675.You set the null and...

You are buying a new house on a 30-year, 5.2% mortgage loan of $230,000. A) How...

You are buying a new house on a 30-year, 5.2% mortgage loan of $230,000. A) How much will your monthly payments be? B) How much will go toward principal in the 75th month? How much will go toward interest in the 75th month? What will be the balance after 75 months? C) How much interest will you pay in total over the 30 years? D) If you do a 15-year loan instead of a 30-year one, how much will you...

I am buying a new house today and plan to make some updates and fixes to...

I am buying a new house today and plan to make some updates and fixes to the new place over the next four years. Expenses include: $1,000 for an electric dog fence, installed today but payment is not due until two years from now $8,000 for new laminate flooring in much of the house, installed now and payment is due now $12,000 for a new shower and master bath - will wait four years to do this install and pay...

You are buying a new house on a 30-year, 6.2% mortgage loan of $230,000. A. How...

You are buying a new house on a 30-year, 6.2% mortgage loan of $230,000. A. How much will your monthly payments be? B. How much will go toward principal in the 55th month? How much will go toward interest in the 55th month? What will be the balance after 55 months? C. How much interest will you pay in total over the 30 years? D. If you do a 15-year loan instead of a 30-year one, how much will you...

Question