In: Finance
Today is January 1st, 2017. Pauline just bought a three-bedroom house in the city of Newyork for $1,000,000. She put down 20% of the house value as deposit, and borrowed the remaining amount from Commonwealth Bank of Australia (CBA). The bank charges a fixed rate of 5.6% per annum on the loan, payable with fixed monthly instalments. The maturity of the loan is 25 years.
Part 1:
Cost of house= $1,000,000 Deposit= 20%
Therefore, net loan amount= $1,000,000*(1-20%) = $ 800,000
Amount of monthly payments= $ 4,960.59 Calculated as follows:
Part 2:
Principal amount of last installment= $4937.55
Interest amount of last installment= $23.04
Relevant portion of amortization schedule is appended below: