2.2 2.2.1 Loan information: Deposit: 8% Interest rate: Prime + 2% Loan period 20 years (Assume the prime rate is 9%) Calculate the real cost of the house with the given information above. Make use of the factor table in question 2.1 where factor values are needed. You may use the following formula to guide you in your calculations. • Deposit Loan amount = house price - deposit Monthly repayments = interest prime rate + 2% (get factor for interest from factor table above Loan length 20 years Monthly repayment = loan amount ÷ 1000 x factor Real cost = Monthly repayment amount x number of repayments made. (7)
