What is the beginning mortgage loan repayment

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Reference no: EM131984687

Mr Grants wishes to purchase an apartment in Kabulonga, a high cost residential area of Lusaka. The apartment is situated in a tree-lined avenue. The purchase price, with costs, is K710,000 and he is able to obtain a 100% mortgage loan at an interest rate of 6%, interest compounded monthly. The term of the loan is 20 years. The central bank has released preliminary data that the property values are expected to rise at a rate of 9% per year (0.75% per month). Mr Grant intends to rent out the property after costs at a rate of K4,000 per month for the first year. Interest and rent are payable at the beginning of each month. Required: (a) What is the expected the expected value of the apartment in 20 years time? (b) What is the beginning mortgage loan repayment at the beginning of each month? (c) What is the net amount that Mr Grant has to pay in each month?

Reference no: EM131984687

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