You have just finished university and are thinking about buying a house in the future. You have a job and figure you are able to save $250 a week. You think that the price of the house you would like to buy will be about $600000 and you will require a 10% deposit.

• You now have your deposit and have identified the house you want to buy. You apply for a loan that has the following conditions:

- An interest rate of 2.29% per annum compounded monthly

- Monthly payments - A late fee of 5% of the overdue payment

- An establishment fee of $500

- A term of 30 years

- The house purchase price will be $600000

1. What is your monthly payment? (5Marks)

2. What is the future value of all the payments you will make? (5Marks)

3. Imagine that you go through a financially hard time in year 10 of your mortgage

   which causes you to make 12 payments late. How does this change your answer to part B? (10 Marks)

4. If the value of your house increases at 1% per annum every year after you bought it, have you made a profit by the end of the mortgage? (10 Marks)