Mr. HH makes a 10% down payment for a mortgaged home worth GHC 420,000. He obtains the loan and intends to finance it over a 20 year period. The current fixed rate is 18% p.a

QUESTIONS

4. Which of the following figures represent the principal component of the repayment in the 5th year? *

1 point

B. GHC 509.78

C. GHC 544.35

D. GHC 321.67

A. GHC 394.09

5. The interest component of the repayment amount in the 5th year is.*

1 point

D. GHC 5,114.33

B. GHC 6,040.91

A. GHC 1,180.91

C. GHC 5439.91

6. What will be the closing balance on the loan in the final month of the 20th year? *

1 point

C. GHC 5434.17

A. GHC 42,000

D. GHC 3,212.09

B. GHC 0

7. Assuming Mr. HH pays GHC 50,000 over and above the required monthly payment in the 70th month, what will be the opening balance for the 71st month? *

1 point

D. GHC 345,789.08

A. GHC 307,966.91

B. GHC 357,900.96

C. GHC 560,900.44

8. Which of the following statement (s) is correct assuming that the partial prepayment is a one-off event and Mr. HH continues the same equal monthly payment thereafter. I. Subsequent monthly interest payments are reduced II. Subsequent principal payments increases. III. Both subsequent interest and principal payments are reduced. IV. There will be no change in the principal payments as only interest payments are affected. *

1 point

D. I and IV only

C. I and II only

A. I and IV only

B. III only

9. Using the information above, assume that the interest rate was an ARM which changed to 20% at the end of the 12th month. Determine the new equal monthly payment that Mr. HH will be required to make. *

1 point

A. GHC 6,412.43

D. GHC 5,778.98

B. GHC 5,904.87

C. GHC 4,999.00