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. [1] R49 523,75 [2] R39 619,00 [3] R11 885,70 [4] R6 310,10

Answer 1

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

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

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=

$$\frac{141740×0.047×(1+0.047)^{40})}{(1+0.047)^{40} - 1}$$

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