An wishes to buy a house in Mowbray, and needs to borrow $350,000 from the ABC Bank which will charge interest at a rate of j12 = 6% p.a. Initially she intends to repay this loan with fortnightly payments of $1500, with the first payment occurring one month after the loan was taken out. However, after making 11 payments she loses her job and misses the 12th, 13th, 14th payments. By the time of the 15th the payments are resumed and from the 16th payment she plans to drop this back to $1000 per fortnight.

a. How big does the 15th payment have to be to return you to your original repayment schedule?

b. Determine how long it takes to repay the loan.

c. Find the size of the partial payment. Describe and perform a sanity check on your answer.

d. Construct an amortization table showing the last three payments (i.e two full payments and a partial payment), and describe and perform a sanity check on the final outstanding principal.

Answer rating: 100% (QA)

r 54 per annum compounded monthly r 5412 045 00045 per month PMT 2500 PV 350000 r 045 FV 0 compute N PV PMTr1 11rN FV1rN 350000 2500000451 110045N 1 1... View the full answer