Peter now has $60,000 cash to invest in a property with purchase price of $300,000 property....

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Peter now has $60,000 cash to invest in a property with purchase price of $300,000 property. To finance the purchase, he could obtain a $240,000 loan from either one of the following two banks. Both loans require monthly repayments. Lion bank: a $240,000 loan at 9.5 percent for 20 years. Tiger bank: a $180,000 loan at 9 percent for 20 years and a second loan for $60,000 at 13 percent for 20 years. Required: (a) What are the monthly repayments required by the two banks? Use the formula method. Show all workings. (b) Which bank should Peter choose? Briefly explain. (Word limit: 50) (8 marks) (3 marks) (c) Given that Peter chooses the loan outlined in part (b), and after residing in the property for 5 years, he decides to clear the remaining balance. How much would he owe at that point? Use the formula method. Show all workings. (4 marks) Peter now has $60,000 cash to invest in a property with purchase price of $300,000 property. To finance the purchase, he could obtain a $240,000 loan from either one of the following two banks. Both loans require monthly repayments. Lion bank: a $240,000 loan at 9.5 percent for 20 years. Tiger bank: a $180,000 loan at 9 percent for 20 years and a second loan for $60,000 at 13 percent for 20 years. Required: (a) What are the monthly repayments required by the two banks? Use the formula method. Show all workings. (b) Which bank should Peter choose? Briefly explain. (Word limit: 50) (8 marks) (3 marks) (c) Given that Peter chooses the loan outlined in part (b), and after residing in the property for 5 years, he decides to clear the remaining balance. How much would he owe at that point? Use the formula method. Show all workings. (4 marks)

Answer rating: 100% (QA)

a Monthly Repayments Lion Bank Monthly Interest Rate Convert the annual interest rate 95 to a monthly rate 95 12 monthsyear 07917 per month Loan Term ... View the full answer