Ato Bekele is thinking of buying a G+2 building 5 years form now on a mortgage basis. The building will be used for office purpose for his new business that costs Br. 500, 000. The required down payment is Br. 100, 000,with monthly mortgage payment for 30 years at a rate of 12% compounded monthly. To cover the down payment Bekele has established a sinking fundaccount in Dashen Bank, which pays 10% interest compounded quarterly. 

                 

Required: 

1. How much Bekele should deposit at the end of every quarter to meet the objective of the down payment?
2. Determine the amount of monthly mortgage payment to be made to discharge the mortgage within 30 yrs.
3. What is the amount of total interest paid on the mortgage?
4. What is the total amount paid over the entire period of the mortgage?

Answer rating: 100% (QA)

To determine how much Bekele should deposit at the end of every quarter to meet the objective of the down payment we can use the formula for the futur... View the full answer