Problem Statement
Maya borrows $\$240,000$ to buy an apartment. The loan is at an interest rate of $5.4\%$ per annum compounded monthly, repaid by equal monthly installments over 20 years.
**(a)** [3 marks] Calculate Maya's monthly payment.
**(b)** [2 marks] Calculate the total amount Maya repays to the bank over the 20-year period.
**(c)** [2 marks] Determine the total interest paid over the life of the loan.
Verified Solution & Marking Scheme
Part (a) [M1]
TVM parameters: $N = 20 \times 12 = 240$, $I\% = 5.4$, $PV = 240000$, $FV = 0$, $P/Y = 12$, $C/Y = 12$
Part (a) [A1]
Monthly repayment $\text{PMT} = \$1,637.52$
Part (b) [M1]
Total repaid $= 240 \times 1637.52$
Part (b) [A1]
$\$393,004.80$
Part (c) [M1]
Interest $= \text{Total repaid} - \text{Principal} = 393004.80 - 240000$
Part (c) [A1]
$\$153,004.80$