A couple takes up housing loan of $\$L$ and the interest is charged before each monthly repayments a

Question

A couple takes up housing loan of $\$L$ and the interest is charged before each monthly repayments at a fixed rate of $p\%$ per annum. Their monthly repayment commences on 1 September 2021. Monthly repayments of $\$x$ are due and payable on the first day of subsequent months until their housing loan is fully repaid. State an expression in terms of $L$ and $p$ for the interest charged before their first repayment on 1 September 2021. [1] Show that the outstanding loan at the start of the ${{n}^{\mathrm{th}}}$ month after their monthly repayment is given by ${{\left( 1+\frac{p}{1200} \right)}^{n}}L-\frac{1200x}{p}\left[ {{\left( 1+\frac{p}{1200} \right)}^{n}}-1 \right]$. [3] The couple is taking a housing loan of $\$504,000$ at a fixed interest rate of $2.6\%$ per annum. Calculate the monthly repayment if the couple plans to repay the loan in $30$ years. [2]

Accepted Answer

(i) Lp/1200; (ii) Shown; (iii) $2017.72

2021 HCI Promo Q12

2021 HCI Promo Q12

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