A prospective buyer is contemplating whether to purchase an apartment which is currently available on the market for the price of $300,000. The Buyer and their partner had a thorough discussion which ended at a stalemate.

If they take out a mortgage, the rent of $1200 they pay currently can instead be regarded as equity for their own place. The family of the buyer is willing to support the purchase by paying the down payment on the apartment as long as the buyer and their partner pay it back monthly over the next 5 years with 2% interest. As a reference, one of the buyer's acquaintances had to put down 20% of the full price and was quoted 4% for a 30 year mortgage.

The partner is not so open to the idea because he thinks that the mortgage rate plus the $200 strata fess will be too much for them. Also, there were news that the apartment prices are expected to fall by 15% in the next 5 years.

The prospective buyer is currently making $3016 per month and their partner $2940(It can be assumed that these remain constant for the next 5 years). Also, both currently possess debt and need to pay it off.

The buyer has $16,000 in student loans for which they will make monthly payments at 4.5% interest quarterly compounded for the next 2 years.

Their partner has $20,000 in student loans with the same interest rates as the buyer and they will pay it off in 36 months. Additionally, they possess a $7500 credit card debt at 9% compounded monthly which will be paid off in the next 3 years as well.

Their current household expenses are $2000. It is assumed these will remain constant long term.

Questions:

1) What is the effective monthly interest for each loan?

2) Using a table in Excel, show month-by-month for the next 5 years (60 months), the buyer and partner's income after expenses and debt, before the rent payment.

If you could solve using Excel, it would be much appreciated.

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