Question 1196141: Please help with the homework:
Liza purchases an apartment by paying a deposit of R60000, and obtains a 20 year loan for the balance of R120000 at 20% interest rate per annum compounded monthly. After four and half years, the bank adjusts the interest rate to 18% per annum compound monthly. What is the new amount that he must pay if the term of the loan remains the same?
Found 2 solutions by ikleyn, MathTherapy:
Answer by ikleyn(52903)   (Show Source):
You can put this solution on YOUR website! .
Please help with the homework:
Liza purchases an apartment by paying a deposit of R60000, and obtains a 20 year loan for the balance
of R120000 at 20% interest rate per annum compounded monthly. After four and half years, the bank adjusts
the interest rate to 18% per annum compound monthly. What is the new amount that he must pay if the term
of the loan remains the same?
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Who is "he" in your post ?
Answer by MathTherapy(10557)  (Show Source):
You can put this solution on YOUR website! Please help with the homework:
Liza purchases an apartment by paying a deposit of R60000, and obtains a 20 year loan for the balance of R120000 at 20% interest rate per annum compounded monthly. After four and half years, the bank adjusts the interest rate to 18% per annum compound monthly. What is the new amount that he must pay if the term of the loan remains the same?
STEP 1: Determine the monthly payment.
However, instead of using an online mortgage calculator, I believe it'd be better to find this
using the following formula:
 , where: 
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STEP 2: Calculate the PRESENT VALUE of an ANNUITY, for 15.5 years, or 15.5(12) = 186 FUTURE monthly payments
(calculated in STEP 1), and at the same interest rate (.2, or 20%).
**Note that 4.5 years' (54 monthly) payments were already made.
Again, instead of using an online calculator, I believe it'd be better to find this
using the following formula:
 , where: 
=================================================
STEP 3: Determine the NEW monthly payment.
However, instead of using an online mortgage calculator, I believe it'd be better to find this
using the following formula:
, where: 
When all is "said and done," the NEW, lowered monthly mortgage payment should be $1,800.47, down from $2,038.59.
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