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Calculate the effective annual rate on the loan

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QUESTION - Now that they have accumulated a deposit of 70,000, Jack and Jill intend to use the deposit to take out a housing loan to purchase a home. The house costs $640,000. The loan is to be repaid in equal monthly instalments (end of month) over a term of 25 years. The interest rate quoted by the Bank is j12 = 4.2%pa.

Calculate the effective annual rate on the loan.

How much is the monthly repayment?                                     

How much principal is repaid in the 60th repayment?

How much would they still owe at the beginning of the month of the 160th repayment?

Reference no: EM133020387

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