Question

suppose that you have just celebrated your 18th birthday today. You decide to start saving money to purchase your first home in 12 years, which will cost $650,000. You aim to save sufficient money to pay the 15% initial deposit, and will take a mortgage to cover the 85% of property cost. The nominal interest rate for the savings account is 13% per annum compounded fortnightly. The nominal interest rate charged by the mortgage provider is 6% per annum compounded monthly.

- Option 1: The mortgage will be repaid over 20 years by equal fortnight-end-instalments.

c) Calculate the fortnightly repayment.

d) Calculate the interest component for the 24^{th}
repayment.

e) Calculate the mortgage outstanding balance immediately after the first 200 payments. (1 mark)

Answer #1

Today is your birthday and you decide to start saving for
college. You will begin college on your 18th birthday and will need
$10,000 per year at the end of each of the next 4 years (after that
18th birthday - isn't it nice the college lets you pay at the end
of the year!) You will make an identical deposit each year up to
and including the year you begin college. All your money will earn
12% interest including...

You just celebrated your 30th birthday and plan to
retire when you turn 64. You have $15,568 accumulated in your RRSP
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years, starting today. On your 64th
birthday you plan to withdraw $45,000 to pay off your mortgage and
the remaining funds will be used to buy an annuity that will pay
you $4,000/month for 26 years, with the first withdrawal starting
one month after your 64th...

You just celebrated your 40th birthday. You plan to
retire when you turn 65. Today you have $105,736.62 accumulated in
your retirement plan and plan to continue adding money each month
to your retirement plan for exactly 25 years, starting one month
from now. When you retire you will receive a $40,000 retirement
bonus from your employer and will immediately deposit the money
into your retirement plan. You will then use the accumulated funds
to purchase an annuity that will...

You are buying a property costing of $750,000 by taking a
mortgage to cover the entire purchase price. The nominal interest
rate is 6% per annum compounded monthly. The bank offers 3 options
for the structure of the repayments.
Option 3: Month-end-instalments of $Y will be made for the first
5 years. Then the bank offers you a payment free period (i.e., no
repayments required) of 5 years. After that, the remaining balance
will be repaid over 15 years by...

Today is your 21st birthday and you just decided to start saving
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month starting one month from now. You plan to retire as soon as
you can accumulate $1 million. If you can earn an average of 8%on
your savings, how old will you be when you retire?

a) on your sister’s 10th birthday, your parents want
to invest a certain amount to enable her to withdraw R25 000 every
six months from her 18th to her 24th birthday (both birthdays
included). Calculate the sum they will have to invest if compounded
interest is estimated at 12% per annum, compounded biannually.
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years later and...

Today is your sons’ 6th birthday and you have saved $60,000 so
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education starting his 18th birthday for 4 years. How much money
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to the nearest dollar)?
a. $99,7559
b. $205,907
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Your friend is celebrating her 22nd birthday today
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She estimates that the annual spending needs would be $210,000
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your monthly mortgage payment for this loan? Please show your excel
formula in your answer and explain step-by-step calculation to
arrive to your answer.

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