Suggest The Best Loan Amount For Mr
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SOLUTIONS: a) Suggest the best loan amount for Mr. Rashid. Give three reasons for your suggestion.
The best amount: RM 32 000
Reasons: •
Moderate interest
•
To avoid overspend
•
He will not be burden with the monthly payment.
b) How much will Mr. Rashid have paid on his mortgage at the end of his 10 years if he pays on flat scale/rate? Interest = PRT/100 = ( RM 32 000 x 8 x 10 years) / 100 = RM25 600 Total Payment: RM 57 600 c) How much more than the mortgage amount will he have paid based on the
above calculation.
Mortgage Amount: RM 25 600
d) Suggest a suitable amount of his monthly instalment on sliding scale scheme and state the reason for the amount paid.
Monthly payment: RM 480 Reasons: •
Not too high monthly payment
•
He can afford to pay for monthly
•
He can finish payback all in 10 years
e) Show how Mr. Rashid can compute the portion of his monthly payment that is used for paying interest and principal in the first two months for this sliding scale scheme.
First month: Interest = PRT/100 = (RM 32 000 x 8% x 1/12) / 100 =RM 213.33
Monthly payment: RM 480 •
Principal = RM 266.67
•
Interest = RM 213.33
Second month: Interest = PRT / 100
= (RM 31 733.33 x 8% x 1/12) / 100 =RM 211.56
Monthly payment: •
Principal = RM 268.44
•
Interest = RM 211.56
MONTHS
PRINCIPAL
INTEREST
First month
RM 266.67
RM 213.33
Second month
RM 268.44
RM 211.56
Table of payment for the first two month
first month
.
principal interest
second month
principal interest
The best amount: RM 32 000
Reasons: •
Moderate interest
•
To avoid overspend
•
He will not be burden with the monthly payment.
b) How much will Mr. Rashid have paid on his mortgage at the end of his 10 years if he pays on flat scale/rate? Interest = PRT/100 = ( RM 32 000 x 8 x 10 years) / 100 = RM25 600 Total Payment: RM 57 600 c) How much more than the mortgage amount will he have paid based on the
above calculation.
Mortgage Amount: RM 25 600
d) Suggest a suitable amount of his monthly instalment on sliding scale scheme and state the reason for the amount paid.
Monthly payment: RM 480 Reasons: •
Not too high monthly payment
•
He can afford to pay for monthly
•
He can finish payback all in 10 years
e) Show how Mr. Rashid can compute the portion of his monthly payment that is used for paying interest and principal in the first two months for this sliding scale scheme.
First month: Interest = PRT/100 = (RM 32 000 x 8% x 1/12) / 100 =RM 213.33
Monthly payment: RM 480 •
Principal = RM 266.67
•
Interest = RM 213.33
Second month: Interest = PRT / 100
= (RM 31 733.33 x 8% x 1/12) / 100 =RM 211.56
Monthly payment: •
Principal = RM 268.44
•
Interest = RM 211.56
MONTHS
PRINCIPAL
INTEREST
First month
RM 266.67
RM 213.33
Second month
RM 268.44
RM 211.56
Table of payment for the first two month
first month
.
principal interest
second month
principal interest
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