This question is worth 10 marks in total. This is a written calculation question, and you should perform the necessary calculations/working on paper to later be scanned and uploaded. Start a new page for this question. For dollar amounts, give your answer to the nearest cent. For interest rates, give our answer as a percentage rounded to 2 decimal places.

If any parts of the question use values from earlier parts, use the EXACT values from earlier parts

Suppose that you have just celebrated your 18^th birthday today. You decide to start saving money to purchase your first home in 10 years, which will cost $500,000. You aim to save sufficient money to pay the 10% initial deposit, and will take a mortgage to cover the 90% of property cost. The nominal interest rate for the savings account is 26% per annum compounded fortnightly. The nominal interest rate charged by the mortgage provider is 12% per annum compounded monthly.

a) Calculate the required size of fortnight-end-saving instalments, so that you will have sufficient funds to pay the initial deposit for the property.

b) To help you, your parents will deposit $200 into your savings account at the end of every 2 years. If you also make the regular fortnightly deposit found in part (a), calculate the future value of your savings immediately after the last deposit.

Suppose that you have just celebrated your 28^th birthday today. The bank offers 2 options for the structure of the mortgage repayments.

• Option 1: The mortgage will be repaid over 25 years by equal fortnight-end-instalments.

c) Calculate the fortnightly repayment.

d) Calculate the interest component for the 26th repayment.

e) Calculate the mortgage outstanding balance immediately after the first 260 payments.

• Option 2: No month-end-instalments will be made for the first 18 months. Commencing at the end of the 19^th month, a total of 200 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 $12,000 will be made at the end of the 300^th month at the same time as the last instalment of $X.

f) Calculate the value of X.

Please show working on a piece of paper