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Calculate the monthly loan repayments

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Reference no: EM133160972

Question - You have approached a commercial bank to obtain a fully amortised mortgage loan of $475,000 to purchase your first home. You are offered a 30-year loan with an interest rate of 4.5% p.a. compounded monthly. Loan repayments will be made at the end of each month, starting at the end of the first month.

1. Calculate the size of the monthly loan repayment correct to the nearest cent.

2. If the loan repayments are made at the beginning of each month, calculate the monthly loan repayments correct to the nearest cent.

3. You read recently that commercial banks currently practice "liability management". Explain what it means for a bank to practice liability management.

Reference no: EM133160972

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