The Samiltons Sdn Bhd is deliberating whether to purchase a factory or continue to rent for the next 10 years. Samiltons Sdn Bhd have a total of RM 40,000 available now and estimate that they can afford up to RM 3,000 per month for the total mortgage payment. If Samiltons Sdn. Bhd do not buy a factory, they will continue to rent the factory they currently occupy for RM 2700 per month. They will also place the RM 40,000 into an investment instrument that is expected to earn at the rate of 6% per year. Additionally, they will add to this investment at the end of each year the same amount as the monthly 15-year mortgage payments. This alternative is called the rent- don't's Any money not spent on the down payment or monthly payment will be invested and return at a rate of 6% per year (0.5% per month). The Samiltons Sdn. Bhd anticipate selling the factory after 10 years and plan for a 10% increase in price, that is, RM 363,000 (after all selling expenses are paid) With reference to the above data and Table 1 below. Evaluate the information given, then recommend the best plan to Samiltons Sdn. Bhd. Refer Below - Table 1: Information. (40 marks) Table 1: Information Two financing plans using fixed-rate mortgages are currently available. The details are as follows. Plan Description 30-year fixed rate of 5.25% per year interest; 10% down payment 15-year fixed rate of 5.0% per year interest; 10% down payment Other information: Price of the house is RM 330,000. Taxes and insurance (T&I) are RM 500 per month. Up-front fees (origination fee, survey fee, attorney's fee, etc.) are RM 3000. A B The Samiltons Sdn Bhd is deliberating whether to purchase a factory or continue to rent for the next 10 years. Samiltons Sdn Bhd have a total of RM 40,000 available now and estimate that they can afford up to RM 3,000 per month for the total mortgage payment. If Samiltons Sdn. Bhd do not buy a factory, they will continue to rent the factory they currently occupy for RM 2700 per month. They will also place the RM 40,000 into an investment instrument that is expected to earn at the rate of 6% per year. Additionally, they will add to this investment at the end of each year the same amount as the monthly 15-year mortgage payments. This alternative is called the rent- don't's Any money not spent on the down payment or monthly payment will be invested and return at a rate of 6% per year (0.5% per month). The Samiltons Sdn. Bhd anticipate selling the factory after 10 years and plan for a 10% increase in price, that is, RM 363,000 (after all selling expenses are paid) With reference to the above data and Table 1 below. Evaluate the information given, then recommend the best plan to Samiltons Sdn. Bhd. Refer Below - Table 1: Information. (40 marks) Table 1: Information Two financing plans using fixed-rate mortgages are currently available. The details are as follows. Plan Description 30-year fixed rate of 5.25% per year interest; 10% down payment 15-year fixed rate of 5.0% per year interest; 10% down payment Other information: Price of the house is RM 330,000. Taxes and insurance (T&I) are RM 500 per month. Up-front fees (origination fee, survey fee, attorney's fee, etc.) are RM 3000. A B
