Financial Modelling (Year 12)

Jack borrows $650,000 to buy his first home. He is offered a rate of 6.2% p.a., compounding monthly. He agrees to pay the loan back in monthly instalments of $4,000. The number of payments required to repay the loan is closest to:

• 350

• 355

• 360

• 365

If money is invested into an account and the person lives off the interest earned only. This is known as a __________

Ruva runs into financial trouble and negotiates an interest-only loan. How much will she pay off if her balance reads $450,000 and her rate is 4.25% p.a., compounding quarterly? Round to the nearest dollar.

• $4,653

• $4,250

• $4,900

• $4,781

Nikki negotiates an interest-only loan. Her balance reads $1,200,000 and she is offered a rate of 6.54% p.a., compounding monthly. How much will she pay in interest over the course of two years?

• $86,470

• $13,080

• $156,960

• $6,540

If Paul invests $230,000 into a perpetuity, paying 8.2% p.a., compounding monthly and he plans to live off the interest. How much can he expect to receive each month? Round to the nearest dollar.

• $1,572

• $1,634

• $1,893

• $2,024

Emilio borrows $1200 from a bank with 8% simple interest per year.  How much will he have to pay back total in 2 years?

• $150
• $192
• $1350
• $1392

Principal = $500
Interest rate =5%
Time = 5 years
What is the interest earned?

• 95
• 105
• 125
• 135

Principal = $500
Interest rate =5%
Time = 5 years
What is the interest earned?

• 95
• 105
• 125
• 135

The Interest accrued: ?

Principal Invested: $4,000

Interest Rate: 3% p.a. simple interest

Time Period: 5 years 

• $500

• $600

• $700

• $4,600

The Interest accrued: ?

Principal Invested: $10,000

Interest Rate: 2.5% p.a. simple interest

Time Period: 6 years 

• $1,000

• $1,200

• $1,500

• $11,500