PART A
Jonathon wants to travel overseas. He decides tozaii:Lamonths' time. Jonathon borrows $10 000 off his brother under the following conditions: when Jonathon returns from his overseas trip he is to repay his brother the money owed over 5 years at $220 per month.
1. Calculate the total number of repayments Jonathon has to make to his brother.
2. Calculate the total amount Jonathon has to repay to his brother.
3. What is the flat rate of interest that Jonathon has been charged by his brother?
Jonathon invested the $10 000 in an account that earned and interest rate of 6% p.a. compounded bimonthly (every two months) for the next 12 months. He then opened another account and invested $600 per month for -12 months. This second account earned an interest rate of 6% p.a. compounded monthly.
4. At the end of the 12 months, what amount is in the first account that started with the $10 000?
At the end of the 12 months, what amount is in the second account that had an investment of $600 per month?
6. At the end of 12 months, Jonathon closes both account, how much does he have to take with him on his trip overseas?
Jonathon goes on his trip and has the following expenses while travelling:
Travel $8500
Shopping $4808.45
Food $1208.09
When Jonathon returned home he gave his brother the left over money.
7. How much did Jonathon still owe his brother?
8. How much will Jonathon have to repay his brother each month for the next 5 years if the same interest rate as before applied?
9. Jonathon agrees to pay $200 a month for 3 years. Is his brother better off with this agreement? Justify your answer.
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