Suppose that you have just celebrated your 18th birthday today. You decide to start saving money to purchase your first home in 12 years, which will cost $650,000. You aim to save sufficient money to pay the 15% initial deposit, and will take a mortgage to cover the 85% of property cost. The nominal interest rate for the savings account is 13% per annum compounded fortnightly. The nominal interest rate charged by the mortgage provider is 6% per annum compounded monthly.

Calculate the mortgage outstanding balance immediately after the first 200 payments. (1 mark) Option 2: No month-end-instalments will be made for the first 12 months. Commencing at the end of the 13th month, a total of 150 month-end-instalments of $X will be made. Then the bank offers you a payment free period (i.e., no repayments required) of 2 years. After that, you will continue to make the month-end-instalments of $X for the remaining life of the loan. Further, a residual payment of $10,000 will be made at the end of the 240th month at the same time as the last instalment of $X. f) Calculate the value of X.