Today is 1 July 2021. You are looking to purchase an investment property today (after months of research and negotiations). You have spoken to Peter, the loan specialist at Harrison Bank, to negotiate the terms of your mortgage. You and Peter have agreed to the following terms: You will borrow $490,000 today in order to purchase your chosen property. This mortgage will be repaid by level monthly repayments. Your first repayment to the bank will occur exactly 1 month from today, on 1 August 2021, and the final repayment wll occur exactly 24 years from today, on 1. July 2045. Peter has arranged for an interest rate of 3% p.a. effective to be locked in for the life of this loan. 1)Calculate the size of the level monthly repayment needed in order to fully repay the loan by 1 July 2045. Give your answer to the nearest cent, and do NOT include a dollar sign 2) Determine the value of L12. Give your answer to the nearest cent, and do NOT include a dollar sign
Today is 1 July 2021. You are looking to purchase an investment property today (after months of research and negotiations). You have spoken to Peter, the loan specialist at Harrison Bank, to negotiate the terms of your mortgage. You and Peter have agreed to the following terms: You will borrow $490,000 today in order to purchase your chosen property. This mortgage will be repaid by level monthly repayments. Your first repayment to the bank will occur exactly 1 month from today, on 1 August 2021, and the final repayment wll occur exactly 24 years from today, on 1. July 2045. Peter has arranged for an interest rate of 3% p.a. effective to be locked in for the life of this loan. 1)Calculate the size of the level monthly repayment needed in order to fully repay the loan by 1 July 2045. Give your answer to the nearest cent, and do NOT include a dollar sign 2) Determine the value of L12. Give your answer to the nearest cent, and do NOT include a dollar sign
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Today is 1 July 2021. You are looking to purchase an investment property today (after months of
research and negotiations). You have spoken to Peter, the loan specialist at Harrison Bank, to negotiate
the terms of your mortgage. You and Peter have agreed to the following terms: You will borrow
$490,000 today in order to purchase your chosen property. This mortgage will be repaid by level
monthly repayments. Your first repayment to the bank will occur exactly 1 month from today, on 1
August 2021, and the final repayment wll occur exactly 24 years from today, on 1 July 2045. Peter has
arranged for an interest rate of 3% p.a. effective to be locked in for the life of this loan.
1)Calculate the size of the level monthly repayment needed in order to fully repay the loan by 1 July
2045. Give your answer to the nearest cent, and do NOT Include a dollar sign
2) Determine the value of L12. Give your answer to the nearest cent, and do NOT include a dollar sign
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