What would be monthly repayment amount for both schedules

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Reference no: EM132007472

(a) A family member is thinking about funding his granddaughter’s university education in 8 years when she is expected to enrol at UWI, St. Augustine. He opens a special savings account, where he can receive a lump sum in 8 years. If he is desirous of receiving $60,000 in 8 years when his granddaughter is matriculating, how much would you advise him to deposit in the savings account monthly if annual interest rate is 6%? Show all working.

(b) As a prospective home-owner, you have researched the housing market and you are attracted by two offers. Two $380,000 real estate properties with two different Mortgage (amortization) schedules.

Schedule A requires a down payment of 10% while Schedule B requires a down payment of 12%. If the mortgage is over a period of 20 years at an annual mortgage rate of 7%, what would be the monthly repayment amount for both schedules? Assume that the monthly repayment starts 1 month after the mortgage contract is signed and the down payment made. Show all calculations.

Reference no: EM132007472

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