Long time ago Lisa had put an amount of $50,000 into an investment in the securities market. Now she has $150,000 in her investment account. Required:
- If the average rate of return Lisa earned for the investment is 7.6% per year, how many years she has maintained the investment so far?
- If the Lisa would have wished to obtain the target of $150,000 within 10 years only, how much money should she put into the initial investment given the same rate of return is applied?
- Assume that Lisa would like to put the amount of $150,000 into another investment and aims for a new saving target of $500,000 to buy a new house in 12 years. How much is the rate of return should Lisa aim for to get her $500,000 after 12 year?
- Lisa has another option for her plan to buy a new house: Using $150,000 as a deposit and get a mortgage from a bank to buy the new house. ANZ bank offered Lisa the lending interest rate of 4.85% per year, compounding semi-annually. Commonwealth Bank offered her the lending rate of 4.83% per year, compounding monthly. By calculating EAR, identify which bank should Lisa choose?
- Lisa decided to borrow 350 000 from Commonwealth Bank to buy her new home. The bank offers Lisa the lending rate of 4.83% per year (compounding monthly) and she is expected to make an equal mortgage payment each month for 30 years. Calculate monthly payment Lisa need to make for the mortgage?
- Lisa would like to buy some furniture for the new home. Good Home Furniture offered her the maximum payment credit for the furniture she can buy of $50 a week for one year. The annual interest rate of that commercial loan is 8.5%, assuming compounding weekly. How much furniture can Lisa afford to purchase using the credit offered by the store?
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