Question 4 a) You plan to purchase a new house. To finance the purchase, two banks in the area offer 30-year mortgage lo

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Question 4 a) You plan to purchase a new house. To finance the purchase, two banks in the area offer 30-year mortgage lo

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Question 4 A You Plan To Purchase A New House To Finance The Purchase Two Banks In The Area Offer 30 Year Mortgage Lo 1
Question 4 A You Plan To Purchase A New House To Finance The Purchase Two Banks In The Area Offer 30 Year Mortgage Lo 1 (93.21 KiB) Viewed 27 times
Question 4 a) You plan to purchase a new house. To finance the purchase, two banks in the area offer 30-year mortgage loan for 80 percent of the RM650,000 of the purchase house. The ARB Bank charges 14.5 percent compounded monthly on its mortgage loan. The Trust Bank charges 14.2 percent compounded semiannually. Compute the effective annual return (EAR). Which bank you will choose? (6 marks) b) Compute the present value of RM5,000 per year at a discount rate of 6%, if the first payment is received 8 years from now and the last payment is received 25 years from now. (8 marks) Continued...
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