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You Have Borrowed $300 000 Over 30 Years in Order

question 48

Essay

You have borrowed $300 000 over 30 years in order to purchase your first home.The loan repayments are monthly at a nominal interest rate of 6.5% per annum compounded monthly.
a.What are the repayments?
b.If after two years the interest rate rises to 7.5% per annum what are the new monthly repayments?
c.If the interest rate does not change but from the beginning you decide to repay $2500 per month how long will it take to repay the loan? What amount would be the final repayment?


Definitions:

Discrimination

The unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, sex, or disability.

Surplus Of Labor

A situation where the supply of workers exceeds the demand for labor, often leading to unemployment or underemployment.

Minimum Wage

The lowest legally permissible wage that employers can pay their workers, established by government laws.

Demand For Labor

The total amount of workers that employers in the economy want to hire at various wage levels.

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