Assume that you have set your heart on an apartment that is 5 minutes from the Port Elizabeth Beach and the price is R2 million. You have managed to obtain a 100% mortgage loan from the Standard bank at an interest rate of 7.2%, interest compounded monthly, which means that you will be charged a monthly interest rate of 0.6%. The term of the loan is 30 years.

2.1 Big Five Construction has outstanding E1,000 face value 8% coupon bonds that make semi-annual payments, and have 14 years remaining to maturity. If the current price for these bonds is E987.24, what is the annualized yield to maturity? (2 Marks)

2.2Mr Zulu deposits at the end of each year E2,000.00; E3,000.00; E4,000.00; E5,000.00 and E6,000.00 for five years respectively. What is his series of deposits at the end of five years assuming 6% compound interest? (3 Marks)

2.3 Metro Limited has issued bonds with a face value of E100 which pay a coupon rate of 6%. Coupon payments are payable semi-annually. The quoted yields on similar bonds are currently 8% per year. The maturity date is 10 years time. What is the value of each Metro bond? What is the bonds annual effect interest yield? (3 Marks)