please answer c + d + e
Assume you are currently living in a rented house and paying a monthly rent of 300 OR. You are looking for a credit to build a house in the plot allocated to you by the Ministry of Housing. The cost of construction is around 350 OR/m Assume you will build a house of 150 m. The bank can lend you a maximum of 80% of the total cost. The interest rate is 9% and the credit repayment is over a period of 20 years. a) Estimate the total annual credit repayment (3 marks) b) Estimate the interest payment per year. (3 marks) c) Estimate the incremental cost comparing the rented house with the owned house by considering the cost of credit only and not considering your own funding. (10 marks) d) Considering that the inflation rate is 3%, is it profitable to undertake this project knowing that the value of your house will be double the cost of initial building, in constant prices, at the end of year 20? (4 marks) e) The cost of land development allocated to you and paid by the Government is 15,000 OR. Assume that you have borrowed this amount from a bank with the same conditions as above. Estimate the impact of this subsidy on the Incremental cost comparing the rented house with the owned house (3 marks) ty Calculate the IRR if you have not got the subsidy in the form of a free land. (5 marks) Paragraph Assume you are currently living in a rented house and paying a monthly rent of 300 OR. You are looking for a credit to build a house in the plot allocated to you by the Ministry of Housing. The cost of construction is around 350 OR/m Assume you will build a house of 150 m. The bank can lend you a maximum of 80% of the total cost. The interest rate is 9% and the credit repayment is over a period of 20 years. a) Estimate the total annual credit repayment (3 marks) b) Estimate the interest payment per year. (3 marks) c) Estimate the incremental cost comparing the rented house with the owned house by considering the cost of credit only and not considering your own funding. (10 marks) d) Considering that the inflation rate is 3%, is it profitable to undertake this project knowing that the value of your house will be double the cost of initial building, in constant prices, at the end of year 20? (4 marks) e) The cost of land development allocated to you and paid by the Government is 15,000 OR. Assume that you have borrowed this amount from a bank with the same conditions as above. Estimate the impact of this subsidy on the Incremental cost comparing the rented house with the owned house (3 marks) ty Calculate the IRR if you have not got the subsidy in the form of a free land. (5 marks) Paragraph
