Bank Islam and Bank Bumi House Purchase Financing - Purchase from a developer Bank Islam's house...
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Bank Islam and Bank Bumi House Purchase Financing - Purchase from a developer Bank Islam's house financing scheme under the Bai al-Bitaman Ajil (BBA) principle is as follows: 30 years (monthly installment) Maximum duration of loan: Annual percentage rale (APR) Time first installment due 9.75 percent The first installment is due one month after the bank pays the first payment to the developer. Purchaser must deposit an amount equal to three months installment in an investment account that pays 5 percent return annually. This amount. and the returns cannot be withdrawn until the end of the financing period. Bank Bumi's house financing under the conventional mortgage schemet Maximum duration of loan Annual percentage rate (APR) Time first installment due: 35 years (monthly installment) 10.75 percent Other conditions a Encik Ali purchased a house for RM250,000 and took a 90 percent financing for 20 years from Bank Islam under the BBA principle. The house will be completed in 24 months and the payments due to the developer are as follows: Payment 1. Completion of upon signing of S&P agreement the foundation and footing works the reinforced concrete framework the walls with door and window frames placed in position the roofing, electrical wiring and plumbing the internal and external plastering the roads, drains and sewerage works on handing over with water and electricity supply ready on issue of certificate of fitness Total The 90 percent financing consists of payment no. 2 onwards. Note that Encik Ali will start paying the installments one month after the bank pays the developer for foundation and footing works. Answer the following 2 3. Other conditions: 4. 5. 6. 7. 8. 9 Month immediate One month after the house is completed and keys handed over Purchaser must pay interests due on payments made by the bank to the developer when the house is completed 9 12 15 18 20 22 24 Percentage 10 10 15 10 10 10 15 15 5 100 What is the monthly installment Encik Ali would have to pay to Bank Islam? bHow much he will have to deposit in the investment account? What will be the value of this investment at the end of 20 years? e. Use the Cash Flow function of your calculator to key in the appropriate cash flows and compute the achval APR for the above BBA financing (Note Since the time period is large, and solving for the rate is done in a trial and error basis, your calculator may take a considerable time to solve the problem Just be patient) d. What is the EAR? Bank Islam and Bank Bumi House Purchase Financing - Purchase from a developer Bank Islam's house financing scheme under the Bai al-Bitaman Ajil (BBA) principle is as follows: 30 years (monthly installment) Maximum duration of loan: Annual percentage rale (APR) Time first installment due 9.75 percent The first installment is due one month after the bank pays the first payment to the developer. Purchaser must deposit an amount equal to three months installment in an investment account that pays 5 percent return annually. This amount. and the returns cannot be withdrawn until the end of the financing period. Bank Bumi's house financing under the conventional mortgage schemet Maximum duration of loan Annual percentage rate (APR) Time first installment due: 35 years (monthly installment) 10.75 percent Other conditions a Encik Ali purchased a house for RM250,000 and took a 90 percent financing for 20 years from Bank Islam under the BBA principle. The house will be completed in 24 months and the payments due to the developer are as follows: Payment 1. Completion of upon signing of S&P agreement the foundation and footing works the reinforced concrete framework the walls with door and window frames placed in position the roofing, electrical wiring and plumbing the internal and external plastering the roads, drains and sewerage works on handing over with water and electricity supply ready on issue of certificate of fitness Total The 90 percent financing consists of payment no. 2 onwards. Note that Encik Ali will start paying the installments one month after the bank pays the developer for foundation and footing works. Answer the following 2 3. Other conditions: 4. 5. 6. 7. 8. 9 Month immediate One month after the house is completed and keys handed over Purchaser must pay interests due on payments made by the bank to the developer when the house is completed 9 12 15 18 20 22 24 Percentage 10 10 15 10 10 10 15 15 5 100 What is the monthly installment Encik Ali would have to pay to Bank Islam? bHow much he will have to deposit in the investment account? What will be the value of this investment at the end of 20 years? e. Use the Cash Flow function of your calculator to key in the appropriate cash flows and compute the achval APR for the above BBA financing (Note Since the time period is large, and solving for the rate is done in a trial and error basis, your calculator may take a considerable time to solve the problem Just be patient) d. What is the EAR?
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Answer To calculate the monthly installment deposit amount investment value and EAR for Encik Alls financing from Bank Islam under the BBA principle w... View the full answer
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Principles of Auditing and Other Assurance Services
ISBN: 978-0078025617
19th edition
Authors: Ray Whittington, Kurt Pany
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