document.write( "Question 1164004: Angela wants to buy a house for R700 000.she has a deposit of R50000 she takes out a loan for the balance at a rate of 18%p.a compounded monthly
\n" ); document.write( "Suppose that Angela encountered unexpected expenses and she was unable to pay the 7th,8th and 9th payments. At the end of the 10th month she increased her payments so that she can still pay off her loan in 5years calculate the monthly instalment \n" ); document.write( "
Algebra.Com's Answer #788317 by Theo(13342)\"\" \"About 
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the house costs 700,000.
\n" ); document.write( "the deposit is 50,000.
\n" ); document.write( "the mortgage is 700,000 - 50,000 = 650,000.
\n" ); document.write( "the loan term is for 5 years * 12 = 60 months.
\n" ); document.write( "the interest rate is 18% per year compounded monthly = 18/12 = 1.5% per month.
\n" ); document.write( "use a financial calculator to determine the monthly payment.
\n" ); document.write( "set present value = 650,000
\n" ); document.write( "set future value = 0
\n" ); document.write( "set interest rate per momnth = 1.5
\n" ); document.write( "set number of payments = 60
\n" ); document.write( "set payments at the end of each month.
\n" ); document.write( "calculator tells you that the monthly payment is 16,505.73 at the end of each month for 60 months.
\n" ); document.write( "she stops paying after the 6th payment.
\n" ); document.write( "the remaining balance after the 6th payment is equal to 607,914.85.
\n" ); document.write( "this remaining balance is not paid for 3 months.
\n" ); document.write( "the interest is still being charged.
\n" ); document.write( "1.015^3 * that = 635,683.41
\n" ); document.write( "that's how much is left to pay on the loan.
\n" ); document.write( "the original loan was for 60 months.
\n" ); document.write( "take away 6 months that were paid plus 3 months that were not paid = 9 months already spent.
\n" ); document.write( "therefore, the remaining balance needs to be paid over 60 - 9 = 51 months.
\n" ); document.write( "use the financial calculator again with interest rate of 1.5% per month to pay off the remaining balance of 635,683.41 for over 51 months = monthly payment of 17,922.90 required for the balance of the loan.
\n" ); document.write( "here's what it looks like in an excel spreadsheet analyis.\r
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\n" ); document.write( "\n" ); document.write( "the first and last few months are shown only.
\n" ); document.write( "column H is the remaining balance for payments shown in cell K2.
\n" ); document.write( "column i is the remaining balance for payments shown in cell L2.
\n" ); document.write( "the interest rate per month is shown in cell J2.
\n" ); document.write( "this is the interest rate per month, not the percent interest rate per month, which is 1.5%.
\n" ); document.write( "the payments in cell K2 are applied for the remaining balance in column H until the 6th month, at which point they are stopped and interest is accrued for the next 3 months, after which payments in cell L2 are applied for the remaining balance in column I.\r
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