Planning to Purchase a First Home
Student name: Doan My Hanh Tran
Student ID: 2579564
Tutor: Jean Chin
Tutorial class time: Friday – 1.30PM to 3.30PM
BFIN001: Portfolio Assessment
2013 Semester 2
Assignment C (10% of Total Grade)
Planning to Purchase a First Home
Introduction
My name is Hannah Tran. I am an international student undertaking my last year for a Bachelor of Business degree at University of Australia. I am living with my sister. However, I would like to make up a plan to purchase my first home 8 years after graduating from university. At the end of this year, I would have $6,000 set aside from home purchase. Each year, I would earn 5.5% interest on savings. I do not expect receiving gifts from my family on the date of my first home purchase, as I would like to buy the house all by myself. My target is a little unit in suburb area, which would cost $390,000. I have 20% cash deposit and 2% up-front costs of purchase price of my first home. The interest rate that I have to pay for the bank for my home loan is 6.05% pa, compounding monthly. I plan to repay my home loan in 20 years after my purchase.
A. Loan Repayments
The amount of cash needed to deposit = 390,000 x 20% = $78,000
The amount of up-front costs of home purchase = 390,000 x 2% = $7,800 1. Home loan
The deposit and up-front costs must be paid at the time of purchasing. Therefore, the amount of the loan needed to purchase my first home:
390,000 – 78,000 = $312,000
Since the interest rate on home loan is 6.05% compounding monthly, the interest rate per period is: i = 6.05%/12 = 0.504% 2. Monthly loan repayment
Amount of monthly loan repayment:
312,000 = PMT {[1- (1+0.00504)-240] / 0.005}
<=> PMT = $2,244.27
=> Amortisation schedule for my first home: Month | Beginning Balance | Interest | Payment | Ending Balance | 1 | 312,000 | 1573 | 2,244.27 | 311,328.73 | 2 | 311,328.73 | 1569.61568 | 2,244.27 | 310,654.08 | 3 | 310,654.08 | 1566.214298 | 2,244.27 | 309,976.02 | 4 |
Student ID: 2579564
Tutor: Jean Chin
Tutorial class time: Friday – 1.30PM to 3.30PM
BFIN001: Portfolio Assessment
2013 Semester 2
Assignment C (10% of Total Grade)
Planning to Purchase a First Home
Introduction
My name is Hannah Tran. I am an international student undertaking my last year for a Bachelor of Business degree at University of Australia. I am living with my sister. However, I would like to make up a plan to purchase my first home 8 years after graduating from university. At the end of this year, I would have $6,000 set aside from home purchase. Each year, I would earn 5.5% interest on savings. I do not expect receiving gifts from my family on the date of my first home purchase, as I would like to buy the house all by myself. My target is a little unit in suburb area, which would cost $390,000. I have 20% cash deposit and 2% up-front costs of purchase price of my first home. The interest rate that I have to pay for the bank for my home loan is 6.05% pa, compounding monthly. I plan to repay my home loan in 20 years after my purchase.
A. Loan Repayments
The amount of cash needed to deposit = 390,000 x 20% = $78,000
The amount of up-front costs of home purchase = 390,000 x 2% = $7,800 1. Home loan
The deposit and up-front costs must be paid at the time of purchasing. Therefore, the amount of the loan needed to purchase my first home:
390,000 – 78,000 = $312,000
Since the interest rate on home loan is 6.05% compounding monthly, the interest rate per period is: i = 6.05%/12 = 0.504% 2. Monthly loan repayment
Amount of monthly loan repayment:
312,000 = PMT {[1- (1+0.00504)-240] / 0.005}
<=> PMT = $2,244.27
=> Amortisation schedule for my first home: Month | Beginning Balance | Interest | Payment | Ending Balance | 1 | 312,000 | 1573 | 2,244.27 | 311,328.73 | 2 | 311,328.73 | 1569.61568 | 2,244.27 | 310,654.08 | 3 | 310,654.08 | 1566.214298 | 2,244.27 | 309,976.02 | 4 |