What is the monthly repayment amount

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Reference no: EM132981164

Question - Jane Smith is considering the purchase of a house and will require a bank loan of AUD800,000. The bank has indicated the following terms: 4.8% pa (monthly equivalent rate of 0.4%) fixed interest, 20-year term, monthly repayments, interest and principal such that the loan is fully repaid. [Choose the closest answer choice]

1 - What is the monthly repayment amount?

AUD 5,010

AUD 4,133

AUD 4,701

AUD 5,191

AUD 5,731

2 - If Jane increases the monthly repayment by AUD1000, how many years (approximately) will it take to fully repay the loan?

15 years

11 years

18 years

12 years

19 years

3 - As an alternative, the bank has offered an interest only loan at a rate of 6.5% pa. What is the monthly repayment amount?

AUD 2,951

AUD 4,333

AUD 5,200

AUD 3,200

AUD 4,000

Reference no: EM132981164

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