LOAN SCHEDULE PROJECT

frankfterhours

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Mar 3, 2022
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Office Version
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  2. Mobile
PROJECT: CONTRACTION OF A LOAN REPAYMENT SCHEDULE FOR A HOUSE MORTGAGE

The mortgage, of UGX 1,400,000,000, has a term of 40 years. For the first 2 years, no repayments are made, although interest still accrues on the loan. Interest-only repayments are due from this point until the end of the fourth year. After the end of the fourth year, and up to the end of the term, level repayments are due, set at a level such that the mortgage will be repaid in full at the end of the 40-year term.

All repayments are made quarterly in arrears. Interest is charged at an effective rate of 6% p.a.

i) Calculate the amount of each quarterly repayment

ii) Construct the loan schedule for the mortgage.

iii) Suppose the interest rate increases to 8% in the last 20 years of the loan, show how this change will affect the loan repayment schedule.

The conditions of the loan permit borrowers to make additional payments in order to

reduce the term of the mortgage. These additional payments can be made once each

year, excluding the first two years, subject to a maximum of 20% of the outstanding capital amount, as determined at the beginning of each year of payment. The original

repayments, including the repayments in the first 10 years, will not change but the term of the mortgage will reduce.

The original repayment schedule will remain unchanged except for the term.

Mr Mubiru decides to make additional payments to reduce the term of the mortgage as much as possible.

iv) Determine the shortest possible term that can be achieved in this way.
 

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BSALV

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Office Version
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  3. 2007
schoolwork ?
 
Solution

BSALV

Banned user
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Messages
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  1. 365
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pretty easy with the financial formulas
at startquarterpaymentsat end
1.400.000.000,00 €​
first 2 yearsnothing
1.573.040.000,00 €​
3-4 yearinterest
1.573.040.000,00 €​
23.082.546,98 €​
1.573.040.000,00 €​
5-40 yearall
1.573.040.000,00 €​
-26.534.872,33 €​
 

BSALV

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Joined
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Messages
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Office Version
  1. 365
  2. 2013
  3. 2007
conclusion : i did it in 10 minutes, i'm an expert (if the answers were correct ) ?
 

frankfterhours

New Member
Joined
Mar 3, 2022
Messages
4
Office Version
  1. 365
Platform
  1. Windows
  2. Mobile
pretty easy with the financial formulas
at startquarterpaymentsat end
1.400.000.000,00 €​
first 2 yearsnothing
1.573.040.000,00 €​
3-4 yearinterest
1.573.040.000,00 €​
23.082.546,98 €​
1.573.040.000,00 €​
5-40 yearall
1.573.040.000,00 €​
-26.534.872,33 €​
 

BSALV

Banned user
Joined
Oct 31, 2010
Messages
1,651
Office Version
  1. 365
  2. 2013
  3. 2007
26,500,000 * 35 = 930,000,000 < 1,600,000,000
 

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