document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1138919>Question 1138919</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Antonio is buying a house for N$960,000. He has to pay a 10% deposit and can secure a bond<BR>\n" );
document.write( "from his bank repayable over 20 years at 12% p.a. interest.<BR>\n" );
document.write( "(a) What is his monthly instalment?              (4 marks) <BR>\n" );
document.write( "(b) Another bank is now giving him two better options i.e. to increase the payback period to 30 <BR>\n" );
document.write( "years or to reduce the rate by 1.5% p.a. Find the monthly instalment for each option.<BR>\n" );
document.write( "(i) 30 year payback period                (4 marks)<BR>\n" );
document.write( "(ii) Reduced interest rate                  (4 marks) <BR>\n" );
document.write( "(c) How much money will he save per month using the cheapest option?   </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #756730 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=756730\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> the cost of the house is 960,000.\r<BR>\n" );
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document.write( "he has to pay a 10% deposit and can secure a mortgage from his bank repayable over 20 years at 12% per year interest compounded monthly.\r<BR>\n" );
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document.write( "the amount that has to be mortgaged is 90% of 960,000 = 864,000.\r<BR>\n" );
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document.write( "i used the financial calculator that can be found at <a  rel=nofollow HREF= \"https://arachnoid.com/finance/\" target = \"_blank\">https://arachnoid.com/finance/</a>\r<BR>\n" );
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document.write( "that calculator tells me that the monthly payment is $9,513.38.\r<BR>\n" );
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document.write( "another bank give him two other options.\r<BR>\n" );
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document.write( "the first option is a 30 year mortgage rather than a 20 year mortgage.\r<BR>\n" );
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document.write( "using this option, his payment will be $8,887.21, but that will be for 360 payments rather than 240 payments.\r<BR>\n" );
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document.write( "the second optiom is to keep the 20 year mortgagee but reduce the interest rate by 1.5 percent per year.\r<BR>\n" );
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document.write( "that would make the interest rate equal to 10.5% per year rather than 12% per year.\r<BR>\n" );
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document.write( "divide that by 12 and you get .875 percent per month.\r<BR>\n" );
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document.write( "the payment for that option would be $8,626.00 per month.\r<BR>\n" );
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document.write( "the cheapest option is 20 year mortgage at 10.5% interest rate per year rather than 12% interest rate per year.\r<BR>\n" );
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document.write( "with that option, he would save $9513.38 minus $8,626.0 = $887.38.\r<BR>\n" );
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document.write( "the calculations for each of these options using the referenced financial calculator are shown below.\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2019/041211.jpg\" alt=\"$$$\" >\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2019/041212.jpg\" alt=\"$$$\" >\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2019/041213.jpg\" alt=\"$$$\" >\r<BR>\n" );
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document.write( "any questions about what i did and why i did it, let me know.\r<BR>\n" );
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document.write( " </SPAN>\n" );
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