Thurston and Julie are contemplating buying a house for which they will need a $200,000 loan. They find a suitable lender who offers them the funds at a nominal annual 6.5% fixed rate for the 25-year term and provides them a 25-year loan.

a. What is the monthly repayment for a 25-year loan?

b. How much interest is paid over 25 years?

c. What will be their repayments per period and total interest paid over 25 years if they choose to repay fortnightly rather than monthly?

Answer rating: 100% (QA)

SOLUTION a To calculate the monthly repayment for a 25year loan of 200000 at a nominal annual 65 fixed rate we can use the formula for a fixedpayment ... View the full answer