Mini$-$Case E: $(1$ mark$)$

Chao has an outstanding mortgage balance of $$300,000.$ He has $15$ months remaining on his $5-$year mortgage term at an annual interest rate of $5\%$ compounded semi$-$annually. The current five$-$year fixed rate of interest for a mortgage is $3\%$ compounded semi$-$annually. He would like to $$blend and extend$$ his existing mortgage for another five$-$year or $60-$month, term. Under a $$blend$-$and$-$extend$$ option, what would be Chao$$s blended rate? $(\mathrm{.}5$ marks$)$

Calculation: $(\mathrm{.}5$ marks$)$

Chao loves his Starbucks caf$$ latte every morning but realizes this is quite costly and wants to start saving his money instead. His graduation gift from his parents was a fabulous expresso machine which he retrieved from the back of his closet. Making his own coffee each morning costs him $$0\mathrm{.}98($taxes included$)$ versus his daily Starbucks Caff$$ Misto with taxes and tip, cost him $$9\mathrm{.}59$ per day. What is Chao$$s overall saving, if instead he transfers the net difference of $$8\mathrm{.}61$ to his investment account each morning, investing it at $4\mathrm{.}5\%,$ at compounded weekly interest, for $365$ days per year over $40$ years? The expresso machine is a high$-$quality Italian brand; assume it will last $40$ years. $(\mathrm{.}5$ marks$)$

Calculation: $(\mathrm{.}5$ marks$)$