# (iii) Use your amortisation schedule from part (ii) to calculate the total interest and the total am

(iii) Use your amortisation schedule from part (ii) to calculate the total interest and the total amount paid over the life of the loan. (2 marks) c) The Credit Union charges Sue 3.95 % p.a, compounding monthly and requires monthly repayments. Also, The Credit Union offers a two-year interest-only option with the 9-year loan. This means that for the first two- years, every month Sue would pay only interest on the amount borrowed. Loan repayments consisting of both interest and principal would then commence in year three and continue for 7 years. (i) Calculate the monthly repayment that Sue would have to make starting in year three if she wants to pay off the loan in 9 years. If you wish, use EXCEL to calculate the monthly repayment. EXCEL Instructions: Refer to your own notes taken in class and Topic 4 in the EXCEL booklet for instructions on how to use financial functions to make annuity calculations. (4 marks) (ii) Calculate the total interest paid on the loan with the two-year interest-only option. (3 marks) d) Which option should Sue take? As part of your response you must explain why the option you select is the better of the two alternatives. (2 marks) 0.0425)-1 active inte months Tom White has just started work at 18 years of age and intends to retire at 55. He will be saving \$150 per month during his working life. He invests his money in a superannuation fund paying 8.5% p.a. compounding half- yearly a) How much will he have in this fund when he retires? Provide a clear explanation of why you think this is a future/present value annunity question. (4 marks) b) On retirement, Tom rolls this money over into an allocated pension paying 6.4% p.a. compounding fortnightly. Calculate how much per fortnight he could withdraw, if the pension were to last 15 years. (3 marks) c) What is the outstandarding balance after 10 years? (2 marks) d) If an emergency withdrawal of an extra \$25,000 was needed at the end of the 5th year, what effect would that have on how long the annuity would last? (4 marks) ing fund will Value A

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