Property prices are falling due to recent rate hikes by the RBA, so Anton believes that...
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Property prices are falling due to recent rate hikes by the RBA, so Anton believes that it is a good time to snap up a good investment property. After weeks of research and inspections, he decided to pay $ 1,000,000 for an investment property in the CBD. The loan is 90% of this amount. The loan term is 30 years with equal fortnightly payments. Payments are made at the end of each fortnight, with the first payment to be made a fortnight from now. Assume that interest rate is fixed at 7% p.a., compounded fortnightly for the duration of the loan. There are 26 fortnights in a year. Part a [3 marks] Calculate the size of each fortnightly payment. Part b [2 marks] Calculate the total interest paid on the loan during the entire 30-year loan term. Part c [3 marks] Calculate the loan outstanding amount after the first 9 years, assuming that Anton does not skip any payments. Part d [3 marks] Anton has been making the fortnightly payment you calculated in (a) for the first 9 years. After 9 years, the interest rate increases to 100% p.a. compounded fortnightly, but the number of remaining fortnightly payments stays the same. To pay off the outstanding loan amount, Anton now has to adjust the size of each remaining fortnightly payment. Recalculate the size of each remaining fortnightly payment. Property prices are falling due to recent rate hikes by the RBA, so Anton believes that it is a good time to snap up a good investment property. After weeks of research and inspections, he decided to pay $ 1,000,000 for an investment property in the CBD. The loan is 90% of this amount. The loan term is 30 years with equal fortnightly payments. Payments are made at the end of each fortnight, with the first payment to be made a fortnight from now. Assume that interest rate is fixed at 7% p.a., compounded fortnightly for the duration of the loan. There are 26 fortnights in a year. Part a [3 marks] Calculate the size of each fortnightly payment. Part b [2 marks] Calculate the total interest paid on the loan during the entire 30-year loan term. Part c [3 marks] Calculate the loan outstanding amount after the first 9 years, assuming that Anton does not skip any payments. Part d [3 marks] Anton has been making the fortnightly payment you calculated in (a) for the first 9 years. After 9 years, the interest rate increases to 100% p.a. compounded fortnightly, but the number of remaining fortnightly payments stays the same. To pay off the outstanding loan amount, Anton now has to adjust the size of each remaining fortnightly payment. Recalculate the size of each remaining fortnightly payment. Property prices are falling due to recent rate hikes by the RBA, so Anton believes that it is a good time to snap up a good investment property. After weeks of research and inspections, he decided to pay $ 1,000,000 for an investment property in the CBD. The loan is 90% of this amount. The loan term is 30 years with equal fortnightly payments. Payments are made at the end of each fortnight, with the first payment to be made a fortnight from now. Assume that interest rate is fixed at 7% p.a., compounded fortnightly for the duration of the loan. There are 26 fortnights in a year. Part a [3 marks] Calculate the size of each fortnightly payment. Part b [2 marks] Calculate the total interest paid on the loan during the entire 30-year loan term. Part c [3 marks] Calculate the loan outstanding amount after the first 9 years, assuming that Anton does not skip any payments. Part d [3 marks] Anton has been making the fortnightly payment you calculated in (a) for the first 9 years. After 9 years, the interest rate increases to 100% p.a. compounded fortnightly, but the number of remaining fortnightly payments stays the same. To pay off the outstanding loan amount, Anton now has to adjust the size of each remaining fortnightly payment. Recalculate the size of each remaining fortnightly payment.
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Part a The fortnightly payment can be calculated using the following formula PV x R100 x 1R100N1R100N 1 Where PV is the present value of the loan R is ... View the full answer
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