Introduction To Financial Management - Assignment 1(1).pdf - 8 FIN B280 Introduction to Financial Management Assignment 1 Due date Important note You

Introduction To Financial Management - Assignment 1(1).pdf...

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Assignment 1 Due date: October 21, 2019 Important note You must use word processing software (such as Microsoft Word) to prepare assignments, and submit them via the Online Learning Environment (OLE). All assignments must be uploaded to the OLE by the due date. Failure to upload an assignment to the OLE in the required format may result in the score for the assignment being adjusted to zero. Question 1 (50 marks) a. You plan to buy a flat for your own use. The price of the flat is $5,600,000. You will pay 30% of the property price as a down payment and borrow the rest from a bank. The bank grants you a 30-year mortgage loan, with the mortgage interest rate set at 6% APR. Repayment is made at the end of each month during the loan term. i. (12 marks) Calculate the amount of monthly repayment. ii. You find that you cannot afford the repayment amount in part (a). The bank allows you to repay $15,000 per month, and at the end of the loan term, pay a lump-sum balloon (18 marks) payment to pay off your loan. Calculate the amount of balloon payment.
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