HELP ME GET UNSTUCK TUTORS

I DONT GET THIS

You are a well-known financial adviser in your city. One of your clients is planning to build his dream house by the first month of next year. He approached you and asked you to help him make a decision whether he will apply for a loan or not. The estimated cost of the house, including labor cost is 2,500,000 pesos. Your client is thinking of borrowing such amount from lending company, at an interest rate of 5% compounded quarterly, at a maximum time of 5 years. Currently, he receives a gross monthly salary of 80,000 pesos and spends 40,000 pesos to provide the necessities of his family. Also, at present, he has 600,000 pesos in his bank account invested at 4% compounded monthly for 5 years. With this, he wants to know if he could pay the amount loaned including the interest in 5 years, assuming that the remaining 40,000 pesos from his salary will be paid monthly to the lending company. If his salary is not enough, the client wants to know also if the amount accumulated in his account after 5 years can fully pay the loan. If the amount still does not suffice, he needs your recommendation on how to pay the balance. Your client requested you to present to him the results of your analysis in writing. He wants you to include also in your written report a recommendation on how he can pay the balance, if there is any. Because the decision of your client depend on your report, it should contain correct computations and comprehensive discussion of the results of your analysis. Also, your recommendation should be feasible and must be considered as a win-win solution