Jim and Jane, both aged 33, are married with their 5-year-old son, Johnny. Jim is a Sole-Proprietor (SEP) running an Events Company. Due to the COVID-19 pandemic, his annual income has taken a significant hit over the last 2 years. Currently, his average annual Net Trade Income is estimated to be $80,000. With the economy moving into the endemic phase, he is expecting business to pick up while at the same time, keeping his fingers crossed that another COVID-19 Variant will not further affect his livelihood.

Jane works as a childcare teacher earning a monthly income of $3,000. She has a contractual annual bonus of 3 months in her employment contract. The family is currently living in a 3-room HDB flat in Yishun. They bought it when they first got married 6 years ago and have taken a HDB loan of $300,000 over a 25-year loan tenure. All along, the couple has been servicing the HDB loan using cash. This is because Jim does not contribute to his own CPF account as a SEP, while Jane has not been working until recently.

Jim drives a Toyota MPV which he bought for $80,000 2 years ago. To finance the purchase, he took a car loan of $60,000 at a flat-rate interest of 2% over a 7-year tenure.

As the couple have plans to have another child, they are thinking about upgrading their HDB flat to a 2-bedroom Private Condominium near Farrer Park MRT Station. The Condominium is estimated to cost $1m. It looks like a significant investment, but the couple felt that they can tighten their belts in order to provide the family with a better living environment, and fulfil their aspiration of being a real-estate owner. Currently, the most competitive mortgage package is from ABC Bank at an interest rate of 1.5%. To finance the purchase, they intend to sell the HDB flat now and buy the new property, while staying with Jim's parents until the new property is ready.

Currently, based on resale data from HDB, the most recent transaction in his vicinity was a unit beside his block, sold for $450,000. This unit was located at the 11th storey while the couple is staying on the 5th floor. The couple is confident that the flat could be sold for the same price within 6 months based on the exceeding demand for properties in that location. After all, their flat has been nicely renovated and is in excellent move-in condition. The couple does not intend to borrow beyond age 65.

All the information given is listed in the text above. Bolded words are the parts that I think are relevant to qs (a) and (b), however I am not very sure if calculation is correct.

(a) Determine the mortgage outstanding on their HDB Flat.

(b) Determine the outstanding car loan.

(c) Compute the effective interest of the car loan.