It is Jan 20XX. You plan to purchase a $1.2 million condominium with monthly maintenance fees of $300. You will place a downpayment of $400,000 for the condominium and finance the remainder with a 30-year housing loan, payable by monthly instalments. You are charged 4% per annum for the housing loan.

(a) Calculate the amount you need to pay every month for the condominium. Employ an amortisation table (up to 13 months) showing how much you will pay in interest every month, the principal repaid and the outstanding principal at the end of each month.

What is the outstanding principal at the end of 13 months?

What is the interest amount paid at the end of 6 months?

Explain to your family members the various components involved in calculating the outstanding principal at the end of each month.