Mrs Jones took out a mortgage of £450,000 on 1st April 2007. According to the initial contract,the mortgage was to be cleared fully by a level annuity payable quarterly in arrears for 15years.The repayments were calculated on the basis of a nominal rate of interest of 6% per annumconvertible quarterly.(i) Showing your full workout, calculate the amount of the quarterly repayments.(ii) Calculate the amount of capital which was repaid in the first instalment on1st July 2007.(iii) Calculate the amount of loan outstanding immediately after the quarterlyrepayment due on 1st October 2017 has been made.(iv) At the request of Mrs Jones, starting from the date in part (iii), the outstanding loanis now to be repaid by monthly instalments equal to the quarterly instalmentscalculated in part (i). In this new arrangement, the bank continues to charge thesame nominal rate of interest as agreed initially.As a result, the remaining term of the loan is to be shortened. Further, the finalpayment is then a reduced amount that clears the debt. Thus, working in monthlytime units, find:(a) The revised date when the mortgage is to be cleared by Mrs Jones.(b) The amount of the reduced final payment to the nearest pound.(c) The total amount of interest saved by Mrs Jones following the restructuring.

Loans are paid by the equal fixed periodic payments and these periodic payments carry the payment of…

Mrs Jones took out a mortgage of £450,000 on 1st April 2007. According to the initial contrac he mortgage was to be cleared fully by a level annuity payable quarterly in arrears for 1 ears. The repayments were calculated on the basis of a nominal rate of interest of 6% per annu onvertible quarterly. (i) Showing your full workout, calculate the amount of the quarterly repayments. (ii) Calculate the amount of capital which was repaid in the first instalment on 1st July 2007. C:\

Mrs Jones took out a mortgage of £450,000 on 1st April 2007. According to the initial contrac he mortgage was to be cleared fully by a level annuity payable quarterly in arrears for 1 ears. The repayments were calculated on the basis of a nominal rate of interest of 6% per annu onvertible quarterly. (i) Showing your full workout, calculate the amount of the quarterly repayments. (ii) Calculate the amount of capital which was repaid in the first instalment on 1st July 2007. C:\

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter5: Introduction To Business Expenses

Section: Chapter Questions

Problem 61P

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