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You purchase a $700,000 house in Engadine by paying a $250,000 deposit and borrowing the balance. The loan will be repaid with end-of-month payments over

You purchase a $700,000 house in Engadine by paying a $250,000 deposit and borrowing the balance. The loan will be repaid with end-of-month payments over a twenty-year term at an interest rate of 6% p.a. compounding monthly.

(a) What is the size of each repayment?

(b) Complete the loan amortisation schedule for the first two months.

(c) Verify the amount of the loan outstanding after two months.

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