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Calculate the level contribution she must make monthly

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Reference no: EM132883226

Question - Aishah takes out a 25-year bank loan of RM400,000 to purchase a house. She agrees to pay only the interest payments, at the end of the month, for the first 15 years. Immediately after it, she repays half of the capital as a lump sum. Then she pays only the interest for the remaining 10 years at the end of every quarter and repays the other half of the capital as a lump sum at the end of the term.

Required -

(i) Calculate the total amount of interest paid by Aishah, assuming an annual effective rate of interest of 8.5%.

(ii) Aishah believes that she can earn a nominal rate of interest 9% convertible semiannually from a separate savings account. Calculate the level contribution she must make monthly in advance to the savings account in order to repay half the capital after 15 years.

Reference no: EM132883226

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