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QUESTION 5 Now that they have accumulated a deposit of 70,000, Jack and Jill intend to use the deposit to take out a housing loan

QUESTION 5

Now that they have accumulated a deposit of 70,000, Jack and Jill intend to use the deposit to take out a housing loan to purchase a home. The house costs $640,000. The loan is to be repaid in equal monthly instalments (end of month) over a term of 25 years.The interest rate quoted by the Bank isj₁₂= 4.2%pa.
Calculate the effective annual rate on the loan.
How much is the monthly repayment?
How much principal is repaid in the 60^threpayment?
How much would they still owe at the beginning of the month of the 160^threpayment?

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