The repayment of home loan in future

Assignment Help Financial Accounting
Reference no: EM133239966

Mrs Smith has residual income of $48,000 pa which she can put towards the repayment of a home loan in the future. Mrs. Smith's Bank insists that she needs to set aside a buffer of 30% of this amount in case interest rise or emergencies occur. Assume annual compounding for the following scenarios

1. If the current Fixed interest rate is 3.5% and the term is for 30 years, how much is his bank able to lend to him? Use annual compounding in your calculations 2 marks

2. Assume that Mrs Smith finds a studio apartment for $380,000 that she is willing to buy. What would her annual minimum repayment be?

3. Would this increase or decrease her buffer and to what percentage? Assume the same loan term and 20% deposit finance.

Reference no: EM133239966

Questions Cloud

Define job enrichment and job enlargement : Define job enrichment and job enlargement by providing examples. Job enlargement sounds like a good thing. Explore what to possible disadvantages
Do you think the 3rd goal of the university of technology : SCIT 4009 University of Technology, Do you think the 3rd Goal of the university of Technology Jamaica should be the first Goal in the list of Goals
Identify a policy or practice related to recruitment : Human Resource Policy Discussion - Identify a policy or practice related to recruitment in your organization(Restaurants)
Convey the rationale behind your choice : CS 2301 University of the People - Choose the method of which your companys device's CPU will choose process precedence, using the methods mentioned
The repayment of home loan in future : Mrs Smith has residual income of $48,000 pa which she can put towards the repayment of a home loan in the future.
Describe contributions as source of income to united states : Tourism forms an important source of income. Describe these contributions as a source of income to the United States.
How to model databases using entity relationship diagrams : ART-UE 22 New York University how to model databases using Entity Relationship diagrams - Products are sourced from one or many vendors
Why mature firm with history of stable earnings : Explain two reasons why a mature firm with a history of stable earnings, few investment opportunities and a diverse clientele of investors
Discuss how increasing your level of education would affect : Discuss how increasing your level of education would affect how your competitiveness in the current job market and your role in the future of nursing

Reviews

Write a Review

Financial Accounting Questions & Answers

  Stock is expected to pay constant dividend in perpetuity

The market price of a security is $66. Its expected rate of return is 12%. The risk-free rate is 6%, and the market risk premium is 10%. What will the market price of the security be if its beta doubles (and all other variables remain unchanged)? Ass..

  Exclusive distributor for an automotive product

Lindon Company is the exclusive distributor for an automotive product that sells for $33.00 per unit and has a CM ratio of 34%. The company’s fixed expenses are $157,080 per year. The company plans to sell 15,000 units this year. What is the company’..

  Discuss the first two presidential administrations

Discuss the first two presidential administrations. What was the Washington administration like? What were some of the achievements?

  What role should a department manager have

Question - What role should a department manager have in controlling the cost of unemployment compensation

  Outline a strategy for the company to capitalize

Assess efforts by this corporation to be a responsible (ethical) corporate citizen and determine the impact these efforts (or lack thereof)

  Which failing to made a required adjusting

Which Failing to made a required adjusting? Overstated liabilities and expenses entry related to unearned revenue will cause a company to report

  Discuss propriety of including in the capitalized cost

In general, what costs should be capitalized for self-constructed equipment? Discuss propriety of including in the capitalized cost of self-constructed assets:

  What should be the depreciation expense on this equipment

Fox Co. purchased equipment for $650,000 with 12-year useful life and $35,000 salvage value. What should be the depreciation expense on this equipment

  Added specific goal of human resource management

Identify which one is an added specific goal of human resource management

  Which is true about T accounts

Which is true about T accounts? Transactions are first recorded in T accounts and then posted to the journal. / The right side of T account is called the debit.

  Make a direct materials budget

Make a direct materials budget showing the quantity of material A135 to be purchased for July, August, and September and for the quarter in total.

  Receive payment

It produces its candy and sells it to distributors in May for $220,000, but it does not receive payment until June.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd