Question

A home was bought with a 20% down payment of R177 175.00. The balance was financed for 20 years at 9,4% interest per annum, compounded semi-annually. Find the size of the half-yearly payments for the loan

Answer 1

Loan amount = $R177,175-20 percent$ $Down payment=R141,740$

Half yearly=$\{amount borrowed×r(1+r)^t÷(1+r)^t-1$

Where r is the rate of interest=

$\ 9.4 percent÷2=4.70 percent$

r=number of half yearly payment in 20 years= 20 years

Half yearly payment=

$$141740×0.047×(1+0.047)^40)÷(1+0.047)^40 - 1$$

⁴⁰

Half yearly payment=$4187.08/5.278664= 7923.80 Dollars( approximately)$