Question 3 You are in the market to buy a new car. You have spotted the one you want, an absolute beauty of a demo model, and the sales rep has mentioned that the price is R150,000. You want to take out a vehicle loan, and approach your bank to do so. As you meet all the relevant affordability criteria, they are prepared to offer you a loan, fixed at 1.5% above prime, over a period of 50 months. They will not require you to put down a deposit, or pay a balloon payment. 3.1 What is the definition of the prime rate? (Max. 3 lines) Start writing here: 3.2 By being offered a rate above prime, does this mean you are a higher risk than someone being offered prime, or a lower one? Explain your answer in a brief point. (Max. 3 lines) Start writing here: 3.3 In this context, what is a balloon payment? (Max. 4 lines) 3.4 Using the information given, and assuming a prime rate of 10.5%, what will your monthly repayment be? Be sure to use the tables, and show your workings. Start writing here: 3.5 With that repayment figure, what would the total amount of the repayments paid over the 50 months be? Start writing here: 3.6 If you happened to be sitting on some extra cash, and put down a 20% deposit, would this affect your monthly repayment? If yes, what would it change to? Start writing here: PUFA = 2.11 + PVIFA = 1 Factors not included in this table 1.4562.10 1% | 2% 3% 4% 0% 0% 0.900 0.980 7% % 9% 10% 11% 12% 13% 14% 15% 10% 20% 299 30% 2 1970 1942 1913 1.836 1.889 1890 1800 1.783 1780 1738 1719 1800 160 3 180 100 110010 0,971 0.962 0982 0943 0888 0.926 0.91 0900 0.901 0.980 0,885 0.877 0.870 0.062 0983 0.000 0.0 4 3.902 2.941 2884 2,828 2,775 2.729 2673 2624 2.571 2.531 2,487 241 2102 2,361 2,322 2280 2200 2,100 1,962 1,080 3,808 2717 3,630 3.846 3165 3.387 3,312 3,240 3,170 3,100 3,097 2.074 2,04 2,06 2,700 2,000 2,22 2,100 4800 4,7134,580 4,452 4,329 4212 4,100 3.99 3.080 3,791 3,000 3,000 2517 3,480 3,382 3:274 2,01 2,000 2,436 5,795 5801 5417 5.242 6.678 4917 4.767 4623 4.486 4386 4.231 411129983.000 3.74 3.60 3.306 2,06 2,043 6,728 BA72 6.250 6.002 5,786 6.582 6.380 5.206 5,000 4,00 4712 454 4423 4,200 4,00 4,000 3000 2101 2.000 7.852 7,325 7020 6,733 6.463 6210 5.971 5347 5.585 5.338 5.146 4.968 4.790 4.60 4.6674.341 3.087 .320 2825 9,471 8,963 8.530 8,111 7,722 7.300 7024 0.710 6,418 0,18 5,000 5800 5,426 5,216 6,00 4830 ,1983,871 3,012 9.263 6,760 6,306 7.887 7,490 7,130 6,806 6.48 6,2015,938 5887 5,460 5.20 5.000 4.327 3.868 3,147 10,37 0,787 10.56 9.964 2,386 6.863 6,384 7,943 7.536 7.1616.894 6482 6.1946,916 5,060 6,421 5,187 4430 3,725 3,180 1126 1040 2,900 0,394 0,000 0.368 7.9047.487 7,100 6.70 B12 0,122 002 0.100 6,042 4430 3700 3.700 0,745 8.244 7.786 7,387 6,802 0.020 0,00 0,00 0,00 0,00 COM 3,400 2,200 12,13 13,00 12,11 11,00 10,000,000 0,20 forn Periods Table D Present Value Interest Factons 6.802 0.816 0.2476.000 6.750 4.40 4.91 340 3.010 70 4.600.674,94 3,4971529 2,025 in this table may be cl o 14,72 13.58 12.96 1965 10,0 10,10 04170001 0.313 7.824 7.370 6974 09046806,0646.000 1730 .000 16,40 14,90 15,56 14.20 13,17 12,17 11,27 10,48 0,7690122 ,5440,0727397.120 07206373 0,047 0.70 4.770 3,010 10 17,23 15.88 14,32 13,78 12,06 11,09 10,60 10.06 0.372 0,786 8.2017,10 7.250 6.00 6.467 6,120 6.00 4012 3,900 1,304 18.00 13,13 12,00 11,16 10,34 3,804 0,900 0,346 7,820 7.500 1.850 6.500 6.180 0.87 493 3942 1941 16,38 14,88 13,00 12:46 11,7 10,50 9,816 0,129 0.314 7.900 7,400 7,000,00 6.250 6.820 4870 3,8043,310 18.06 17:01 18,42 14,00 12,82 1976 1904 10,080.28 .040 R07071627,100 6,087 0.312 0.8730.3.00 300 1966 1766 16.94 14,40 13,16 12.00 11.00 10,20 B4 204616.20 16,41 14,00 1340 12:30 1127 10,87 0,80 0,985 0200 1710 7.200 are con la 0.728.1767645 7.70 070 9300 90 morte 21.24 18.01 16.04 15,28 13:40 12.96 1147 10,58 0,7076,005 0,40 7,707.200 6.00 644 873 187 13.01 3.se 22,02 1982 17,41 15,62 14,00 12,78 11.88 10,67 0,8239.07784227.043 2:380 6.736,4046.000 4.940 2,000 1,300 25,81 22.40 19,60 17,2015,27 13,76 1241 11,28 10,279,27 0,084 .055 7,490 7.000 6.566 417 4970 196 2. 38 2049 25,00 2140 15.66 10,3714,50 12,99 11,95 19,672,0161767.500 2.000 6,017 0713 1902 1901,00 32,00 2790 224 9.70 97,00 15,00 13.38 192 10,76 9.70 1991 124 234 7,100 4042 | 0200 100 . 3142 25,73 21,48 18,33 15,78 | 13.80 est Factors for a Rl annuty discounted at k por cent the following equation 1% 2% 3% 4% 5% 6% 10 7% % % 10% 119 12% 13% 14% 1596 10% 20% 206 som 2 0,980 0,961 0.843 0.92 ,980 0,980 0,971 0.942 0,862 0.943 0.035 0.008 0.911010 0.901 lo 30.971 0.942 0.915 0.889 OBCH 0340 0.816 0.794 0.72070103107120483 26 0.907 0,890 0.873 0,867 0.02 0.826 0.812,0797 0,780 0.740 0756 0743 0004 0.640 0.54 w olone 4 0.96109242888 0,686 0123 0722 076 0.735 0.708 0663 0000 000 003 o 3 0,951 0,908 2863 0.822 0,74 0347 0713 0681 0.680 0821 0.500 0.587 0540 0.510 04070478 0462 0,328 0,300 160.942 0.888 9837 0.750 0.746 07060686 9630 0.596 0.64 0.838 0807948004563 0100835 0342 00 7 0.933 0.871 0813 0,760 0.711 0.868 0628 2688 0.547 0.813 0,482 0,452 94250.400 0.300.354 027 4210 0.180 0.923 0.863 07800.71 0,677 0.8270882 0.840 0.502 0,467 04340404 0370 0.3810, 0.00 0.000 0123 0.914 0.837 0,760 0,700 0.65 0.52 0.544 0.500 0,460 0,424 0.391 0.3810.333 0,30 0,20 0,263 0.18 0.134 0,004 100,905 0.820 0744 0.676 0.64 0.368 0.508 046 0.422 0,380 0.382 0.322 0.200 0,270 0.20 0.227 0,16 0,107 0,073 110.008 0.8040722 0.000 0.585 0827 0478 04200,388 0.3600317 0,287 0.281 0,237 0,28 0,190 0.125 0.000.000 120,087 0.78807010628 0,867040704440397 2356 0310 0.20 0387020400 | 130.870 0773 0.681 06010,980 0.4800418 0.96 0328 9 .2000.180.160 0,1120000 2040 140.870 0758 0.861 0577 0,500 0.442 0388 0.340 2290 0.200 0,232 02080.101 a 10 041 048 007 00 2001 160,860 07200823 0.0040,450 0,30 0.3390,292 0,252 0.216 0.16 0.160 0,14 0,1200, 1070,00 0.00 0028 2018 18 0,661 0,743 0,042 0,566 0,481 0.417 0.362 0.313 0.275 0,2300,200,100,1000 1400129 0,00 0,00 0,0069020 17 0,844 0714 0.000 0.613 0,436 0,371 0917 0.270 0,231 0,186 0,170 0,10 0,125 0,100 0000 0.00 0.00 0.00 0012 05870494 0,416 0.390 0.250 0.200 0212 0.180 a 10 0 190,828 0.000 0.870 0978 2,398 0,391 0.277 0,232 0,14 0,1640,10 0,116 0.000 0.000 0.00 0.00 0.00 0010 0.00 .000 0.00 0.00 0.00 0.001 0.014 0.007 PVF = TK Factors not included in this table forn Periods Table C Present-Value Interest for word in this table may be calculated by means of the following user alue Interest Factors for RI Discounted at k por cont 20 0,820 0678 0.564 0.486 037 0312 0258 0.218 0,178 0,140 0,124 100 0,00 0,00 0.00 0.0619.000 9.012.08 22 0,80 21 0,811 0.060 0,538 0,4300.350 0.20 0.212 0,1900, 161 0,138 0.12 0.00 0.077006 005 004 2002 0,000 0.000 0,647 0,622 0,422 0,342 0.278 0.228 0,184 0,150 0,123 0,101 0,083 0,068 0.000 0.04 0.058 0010 0,00 0,00 230,798 0.634 0,607 0,406 0320 0.202 0.211 0,170 0,138 0,112 0.00 0.074 0,000 0.00 0.00 0.00 0018 0.000 0,00 2 0.78 0.622 0492 0.390 0910 0.247 0.19 0.1680,128 0,100 000 0.00 0,00 0,00 0000 0.00 0.000 0.000 de 200760061004700,378 0.296 0230 0,184 0146 0.116 0.002 0.074 0,00 2017 0,00 0,00 0,00 000 lei 30 0,742 0862 0412 0,308 0,23 0,174 0,131 2010 0,078 0,067 0044 0.0004006 0.000 2013 2012 2004 2001 38 0.70 0.500 0.368 0.250 0.11 0.130 0.000 0.00 0.00 0.00 0.00 0.010 2011 2010 0,00 0,00 0,00 100.672 048 0.807 0.200 0.10 0.007 0.007 0.0160.002 0.0220016 0.01 0.000 0.000 0.000 0.00000010 45 0.030 0410 0,20 0,170 01110073 0.01 0.001 0,021 0,00 0,000 0.00 0.001 0,000 0.00 0.001 0.000 800,000 0.372 0,220 0,141 0,00 0,00 0,034 0.021 0,0130,000 0.000 0.000 0.000 0,00 0,00 0,001 - Montepe 2% 3% 4% 5% 6% 7% 1 0% 10% 11% 12% 13% 14% 10% 10% 20% 20% 30% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 SO 3091 3,122 3.150 3,100 3.218 3.248 3.270 3,310 2.342 3.374 3.40 2.000 2,000 2,000 2,000 2,000 2,070 2,000 2,000 2100 2110 2.120 2,180 2,140 2,100 2,100 2,000 2380 2,300 3.40 341 3.500 3.60 34133.000 4,164 1,200 4,310 4,378 4.10 4.500 4.873 1841 | 4710 4779 4,800 48214.000 6.00 6.00 6,00 6,18 5.300 5,416 5,626 5,63 3,781 5,067 5.888 6,106 1228 6.383 6.40 6.10 070 WATT TAE 1.200.00 106.633 6.8026.073,100 7.338 78287316 799 2.115 2.32 BSN .75 BOTY 5.80 11.30 12.750 7462 7.008 0.1426.366.854 0.923 0.200 0.487 9.780 10.00 10400 10.730 11:00 AM 12900 15.00 17380 102 2.214 0.540 0.00 10.381064 11.00 1144 1486 1230 12.00 116 13.20 0.50 11.00 11,0 1190 1200 13:00 13:38 1438 178 13.9 1030 16.50 1 s. 1800 17 2 .00 20.00 28.0 32.00 10.46 10.96 1146 2.01 12.58 13,10 13.12 14.40 18.0 15.94 1872 1798 18,42 10.30 20.0 21.82 28.08 29,38 2. 11 1187 12,17 12,813,40 14,21 14,97 15,78 16:45 1786 1883 18:56 2016 21,00 23,00 24,38 2833 32,3 25 66,41 12 12,681341 14,19 15.00 15.9216.87 17.00 18.90 20,142136227124,13 28.065 2127700 30 . 5.2014. 13 13,81 14.03 15.625,00 17,71 18,00 20,14 2150 22,90 2452 20:21 20.00 20.00 32.00 3430 20.79 4,00 00 07.00 14 14,90 15,97 17.00 18,29 19.60 21.02 22.8624.21 20.02 27.97 3400 32,39 34,80 37.99 -0.50 43,07 50,20 10.00 127.9 40,42 43.64 47.60 0140 18.60 2002 21,58 23,28 28,13 27,18 2036 3177 341 37,28 72,04 100,7 107.3 15 16,10 17:29 1617,2618.64 20,16 21,82 23.6625,67 27.00 30.82 33.00 35.98 30,19 42,75 46.67 $0.0 15.72 60,93 67,44 1301216 17 18A8 20.01 2176 22,70 28.64 28.2130,639,7636.97 40.9444.80 40.0069,7400,1800,00 105,0 1736 285.0 18 19.61 2141 2341 26,66 28,13 30,00 34.00 374 41.30 45.00 5040 66,78 61,700.30 16. ,44 128, 1218037146 25,12 27.87 30,54 39.70 37.30 41454602 51,16 M.2 .400 194. 72736440 M 70,78 10 20.01 22, PVIFA = (1 - Factors not included in this tab 1 for n Periods Table B Futuro-Value Inforost Factor 386688&2DE8BBBBBBBONON-P not included in this table may be calculated by means of the following O 2007 29,76 33,07 10.70 41,00 48,70 61,10 17,27 0,20 7200 10.00 0.00 el 2008 31,97 38.72 39.99 4427 00:42 66,70000 2.20 B1702224 sulmeli 22 24A7 27 30 3954 34.25 38.51 13.30 -0.0156,46 62,87114001,21 22.50 1065 29 25.72 28.4 32,48 36.62 41,4347.00 19. 1904 1973 1974 2710 3 1 08 314330.00 4.50 50.00 58,161616 16.70 10.50 0.2 118218 2 6 60.00 09.50 724 01,18 1046 1902 1903 1903 1838 182673010 1960 25 26,24 32,00 36,46 1,68 47,79 54,00 13.28 73,11 14,70 10.36 114,4 133,3 1556 1010 2139 342 6720 186 230 30 34,7840.57 47.6000.00 66,4470.00 1133 1363 1645190.0 2413 2002 2000 0 1003 1982 2221 8730 0948 73.65 30,32 11 1902 1723 2153 27103416 43175487 1099 112 113 1140 2057 3X 78,40 96,00 120,6 1548 1906 280,1 1379 4426 581,8 767,1 1014 1342 1770 2381 734 2002 48 6618 71,00 12,72 21,0 159,7 2127 2007 3045 625,97180105,6 1358 174 2001 2000 100 10001011 3100 1000 21001345407 AMG 14.58 1126 152,7 200,32903 4065 5738 016,1 1164 1860 2400 . 50 horost Factors for Rinnu compounded atk per cont anon FVIF = (1 +K 1% 2% 3% % % % 7% 8% 9% 10% 11% 12% 1 1010 13% 14% 10% 10% 20% 20% 30% 1,020 1,050 1,040 1.050 1.000 1.070 1.000 1.090 1.100 1.110 1.120 1,130 1.100 1.100 1.100 1.200 1260 1.300 2 1.020 1,040 1.061 1.082 1.100 1.124 1,146 1,166 1,188 1,210 1,232 1.254 1.277 1,300 1,323 1.348 1.440 1.963 1.000 3 1.000 1.061 1.093 1,125 1,158 1,191 1,225 1200 1.236 1331 1,368 1108 1143 1482 1.821 1861 1,728 1.953 2.187 4 1.041 10821,126 1,170 1216 1202 1,311 1,360 1412 164 1,816 1874 1830 1680 1.740 1811 2074 241 2.46 5 1.061 1,104 1,159 1.217 1.276 1338 1,403 1.460 1.530 1.611 1.688 1762 1.942 1.925 2.01 2100 2108 3,082 3,70 6 1062 1,126 1,194 1,268 1.340 1419 1,601 1.587 1.671 1772 1.870 1.974 2.082 2.196 2,313 2,436 2.966 3,015 1,621 7 1072 1,149 1.230 1,316 1.407 1.504 1,808 1,714 1.828 1.940 2,000 2,211 2.380 2,800 2,000 2.826 3.560 476 6.286 1.000 1,1721.267 1,300 1A77 1.504 1718 1.884 1.990 2,144 2,300 2.70 2800 2.250 3.00 3,278 4,300 5.900 0,157 1306 1,423 1.561 1889 1,838 1.99 2172 2358 2558 2.773 .004 3.250 3.518 3,800 5.100 7,401 1060 1,094 1,196 Factors not included in this Table A Future Value Interes 1,791 1.967 2,100 2,067 2.894 2.099 .108 3.396 3.707 2016 14 1000 111.116 1.243 1.364 1.550 1.710 1.808 2.108 2,312 2.580 2.880 3,182 3.40 3,636 4,200 4.002 0.1177,40 11,64 17.02 121,1271,268 128 1.601 1,796 2012 2,282 2,618 2.813 3.138 3.400 3,608 4,388 4,816 5,180 65,000 2,016 14,00 23.30 13 1,138 1,200 1,460 1.605 1,686 2,133 2410 2.720 3,066 3,452 3.06342604,000 3,402 6.169 6.000 10,70 16,00 30,20 141,1401,319 15131,732 1.950 2,281 2870 2.937 3,342 3,7074310 4,887 6,00 0,20170767.988 12,0 22,74 20:37 15 1,161 1,346 1.560 1.101 2.079 2,397 2,750 3,172 3,62 4177 4,786 BAYA 6,254 7.138 6,137 0.000 15,41 2042 31,10 16 1,173 1,3731805 1,873 2,163 2,540 2,062 3.426 3.90 4,596 6,311 0,130 7,087 6,137 0.58 1070 1080 30,000 17 1,184 1,400 1863 1.948 2.22 2.090 3,100 3,700 4.328 5.064 5.000 6.000 7900 2.270 1976 1247 22,10 4111 10,50 1,196 1,428 1,702 2,026 2007 2,654 3.380 3,900 4,717 5,060 6.544 7800 9,024 10,56 12,38 140 20:42 58.50 12.5 1.200 1.45 1.754 2,107 2.827 3,028 2617 4.316 5,142 6,118 7,283 ,610 10:20 12,00 4.20 107001500.30 146.2 20 1.220 1,486 1,006 2,191 2.668 3,207 3,8704661 5.604 0.12 0.002 0.640115213,0 13,2710,4030416034600 21 1.232 1,516 1,860 2.270 2,786 3,400 4,141 5,034 6,100 7,400 8.000 10.00 13.00 15.67 18,82 22:57 40,01 1064247,1 1,916 2.370 2.925 3,604 4,430 5.437 6.660 6,140 9,834 12,10 1471 17,00 21,64 28,19 56.21 1365 212 22 1,245 1,546 23 1,257 1,577 1,974 2,465 3,072 3,420 4,741 5,871 7.258 6.864 11,03 19.66 1663 20,30 24,00 30,38 06:25 104 417.8 24 1.270 1.608 2.003 2.563 3.225 4,0495,072 0341 7911 0,850 12,24 15,16 18.70 23:21 28.63 35.34 7080 2140 542.8 1.641 2,094 2666 3.388 4292 5,427 4.648 6.623 10,63 13.00 17.00 2123 2846 32,880.715,40 2347 rosa ot included in this table may be calculated by means of the following equation forn Periods Miildry tables re-Value Interest Factors for R1 compounded atk per cont 1.811 2.42 3.243 1,322 5,743 7,612 10,06 13.27 1745 22,0 20,90 29.12 50.98 06.2005,102 cm 2,000 2,814 3,216 6.816 7.686 10,68 14,70 2041 28,10 38,67 52,00 72,07 08,10 131,2100,3000,7 248 azza 2,208 3.262 4.6017040 10.20 14.97 21,72 31,41 45,2865.00 90. 0 12,0 1849 2079 37871470182330110 13,76 21,00 31,82 1.33 72.00 100.5 1040 3140 383,78988796435722000 2438 3,782 5,841 1.985 2002 4,36 1,10 1,47 1842 2046 -0,90 14,36 117 118 2000 450.7103 104 1979 100 1000