Question
You borrow $800,000 to buy a house worth $1,000,000. The interest rate is 2.4% pa compounding monthly. The loan term is 30 years with an:
You borrow $800,000 to buy a house worth $1,000,000.
The interest rate is 2.4% pa compounding monthly. The loan term is 30 years with an:
-interest-only period for the first 5 years (months 1 to 60 inclusive); switching to
-fully amortising for the remaining 25 years (months 61 to 360 inclusive).
A loan repayment schedule is shown below, with some parts missing in bold.
Loan Repayment Schedule | ||||
Interest-only for first 5 years, switching to fully amortising for remaining 25 years, | ||||
interest rate of 2.4% pa paid monthly | ||||
Time | Total payment | Interest component | Principal component | Liability, just after payment |
Month | $/month | $/month | $/month | $ |
0 | 800,000.00 | |||
1 | 1,600.00 | 1,600.00 | 0.00 | 800,000.00 |
60 | 1,600.00 | 1,600.00 | 0.00 | 800,000.00 |
61 | 3,548.78 | a | b | c |
62 | 3,548.78 | d | e | ? |
63 | 3,548.78 | 1,592.20 | 1,956.58 | 794,141.97 |
64 | 3,548.78 | 1,588.28 | 1,960.49 | 792,181.47 |
356 | 3,548.78 | 35.28 | 3,513.50 | 14,124.42 |
357 | 3,548.78 | 28.25 | 3,520.53 | 10,603.89 |
358 | 3,548.78 | 21.21 | 3,527.57 | 7,076.32 |
359 | 3,548.78 | 14.15 | 3,534.63 | 3,541.69 |
360 | 3,548.78 | 7.08 | 3,541.69 | 0.00 |
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Which of the below statements is NOT correct? All answer options are rounded to 2 decimal places as is the table above.
Select one:
a. The interest component at month 61 is $1,600.00.
b. The principal component at month 61 is $1,948.78.
c. The amount owing just after the payment at month 61 is $798,400.00.
d. The interest component at month 62 is $1,596.10.
e. The principal component at month 62 is $1,952.68.
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