Mr and Mrs Serebolo plan to buy a house and stop renting. Their total take-home pay...

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Mr and Mrs Serebolo plan to buy a house and stop renting. Their total take-home pay and household expenditure follows: Per month Total take-home pay: R18 600 Current rent paid: R4 600 Food and clothing: R2 600 Water and electricity: R750 Short term insurance: R700 Transportation: R4 200 School fees: R800 Entertainment: R500 2.1 Determine the maximum price of the house that they can afford if interest rates are i) 10%, and i) 12% per year. Assume that they will pay the bank monthly instalments over a period of 20 years. State all assumptions that you may make. (12) 2.2 How will the value of the house that the Serebolo' s can afford change if they buy a number of items on credit and consequently an amount of R2 400 per month is deducted from Mr Serebolo' s salary as a result of a garnishee order that has been issued? (8) [20] Mr and Mrs Serebolo plan to buy a house and stop renting. Their total take-home pay and household expenditure follows: Per month Total take-home pay: R18 600 Current rent paid: R4 600 Food and clothing: R2 600 Water and electricity: R750 Short term insurance: R700 Transportation: R4 200 School fees: R800 Entertainment: R500 2.1 Determine the maximum price of the house that they can afford if interest rates are i) 10%, and i) 12% per year. Assume that they will pay the bank monthly instalments over a period of 20 years. State all assumptions that you may make. (12) 2.2 How will the value of the house that the Serebolo' s can afford change if they buy a number of items on credit and consequently an amount of R2 400 per month is deducted from Mr Serebolo' s salary as a result of a garnishee order that has been issued? (8) [20]

Answer rating: 100% (QA)

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