How much does have to save every week to succeed settlement

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Reference no: EM132812846

James has recently bought a farm in a rural area at $500k. This farm was going to be operated by the other farmer, but that farmer suddenly died due to the COVID-19. Therefore, James immediately contracted ASAP at a cheap price. (James does not need to pay until the farm is completely built which takes 1 year and a half years.) James has found that one bank offers to farmers 50% loan of the property that has to be paid in 20 years by chance. Eventually, James has decided to rent the farm by using the bank loan. He has regularly received bonds and other incomes which can cover the principal and interest from the mortgage and also other land related costs during each year. James wants to take the farm without difficulties during fixing the farm. Therefore, he thinks he should save 10% deposit, and additionally he will be required to spend the extra fee of $5,000 for a tax accountant.

Problem 1: How much does he have to save every week to succeed the settlement on the farm for 1 year and a half years? As he decided to use the mortgage, he opened a brand new bank account which weekly pays at 0.7% p.a.

Problem 2: How much James should repay monthly on his mortgage after the farm finishes the construction? (after this James should start making payments.)

Reference no: EM132812846

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