Linda decided to borrow $350,000 from a bank to buy her dream house. She approached Prosperity Bank
Question:
Linda decided to borrow $350,000 from a bank to buy her dream house. She approached Prosperity Bank and they offered Linda the following mortgage package: interest rate of 2.45 % per year, weekly repayment, for 30 years.
Required:
a) Calculating the amount of weekly repayment Linda needs to make for the mortgage.
b) Linda wishes to have solar panels installed on the house roof. The solar panel provider offers her a pay package of $120/month at the end of each month for 2.5 years. Given the interest rate is 3.0%, calculate the present value of the payment package.
c) Linda is considering two investment offers for saving up money to pay off her mortgage in 10 years. Investment A offers a rate of return of 9.95% per year, compounding daily. Investment B offers a rate of return of 10% per year, compounding quarterly. Help Linda choose the better investment by calculating the Effective Annual Interest Rate (EAR).
Taxation Of Individuals And Business Entities 2015
ISBN: 9780077862367
6th Edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver