T2 KCT 6 (Tutorial)

Dad says ... 

Lets move on to home loans. While we

don’t have to pick one yet, I’m trying to understand the different terms.

Mum says...Can you tell us which one of these loans is the most expensive? (Hint: calculate the EAR, to display 4 decimal places, for each loan to allow comparison)

ME

Bank:    7.15% p.a., interest paid

weekly.

YOU

Bank:  7.17% p.a., interest paid

fortnightly.

WE

Bank:    7.18% p.a., interest paid monthly.

T2 EIC 5 (Tutorial)

Upon

hearing that you are receiving a financial education, your parents call a

family meeting to include you in the discussion of some important financial

decision making. D

We are thinking of buying a new

house in 5 years. The bank estimates the deposit for what is in our price range

to be $100,000. They are also offering us a term deposit for 5 years to save up

for the deposit.

Mum pulls out the term-deposit

brochure and says... 

The interest on the term deposit

is 4.5% p.a. paid and compounded quarterly. But we don't know how much we need to invest

now so that we hit our deposit target.