You purchase a house today for $250000. You pay a 10% deposit and borrow the

You purchase a house today for $250000. You pay a 10% deposit and borrow the

remainder.

(a) If repayments for the borrowing are made each month over the next 20 years

what will be the monthly repayment assuming an interest rate of 6% p.a.

(b)If you pay off $2000 per month how long will it take to repay the loan?

You bought a car for $5000 and sold it two months later for $5200.

(a) What is the simple annual interest rate implicit in this transaction?

(b) What is the corresponding effective annual interest rate?

(c) If inflation is running at 3% pa what is the real effective annual interest rate?