Now that they have accumulated a deposit of $40,000 Ed and his partner Susie wish to take out a housing loan to purchase a home. The house costs $525,000. The loan is to be repaid in equal monthly instalments over a term of 30 years. The interest rate quoted by the bank is a monthly rate of 0.4075%. Ed has misplaced the paperwork showing the annual nominal rate (j12) with monthly compounding.
i. How much is the monthly repayment?
ii. How much interest will be paid in the fourth year?
iii. How much do Ed and Susie owe the bank immediately before making the 200th repayment?