Maame TorTor has just purchased a GH¢70,000.00 house and made a down Payment of GH¢15,000.00.
Required:
i) Determine how much money is needed to amortize (.i.e. pay monthly) the balance at 9% interest rate compounded annually for 25 years. (5 marks)
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The monthly payment P needed to pay off the loan of GH¢ 55,000 at 9% interest per annum for 5 years is given as
ii) Determine the total interest for the 25 years. (2 marks)
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Total Interest on the loan = 461.56(300) -55,000 = GHC83,468.00
iii) Determine after 5 years the equity she has in the house. (3 marks)
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After 5 years (60 months), the present value of the loan is
