Consumption Flat Buying A Two Choices:

"Mortgage Insurance Programme"

"Smart Easy" Top Up Mortgage CALCULATING SPOT 1. Lends 90% of the mortgage

2. fixed rate monthly repayment

3. Loan period 30yrs

4.Charges 1.65% of the mortgage amount at the first time

5. Charges 0.63% each year for the insurance. 1.The 70% of the mortgage will be the same as the "Mortgage Insurance Programme"

2.The remaining 20% of the mortgage will be charged 2.4% at the first 5yrs

3.And will be charged between Prime rate -1.95% to Prime rate-2.6% at the remaining 25yrs

4.A handling fee of 3.65% of the whole mortgage will be charged and transfer to the second mortgage immediately. "Mortgage Insurance Programme" P0=6 400 000 X 90%+6 400 000 X90%*1.65%-6 400 000X1%

(mortgage amount + 1st year insurance - cash discount )

n=12 X 30

(30yrs repay monthly)

i^(12)=5%-2.6%

(Prime rate-2.6%)

r= i^(12)/12

For l= 1,2,3...n

Il= P(l-1)X0.63% if l=12,24,…, 360

Il=0 if otherwise

Pl= P(l-1)X (1+r)-A+Il-1

Pn=0 =6400000*0.9-6400000*0.01+(6400000*0.9)*1.65% =B1 =B9*(1+$B$4)-$B$6+IF(MOD(A10;12)=0;B9*0.0063;0) OR PART 1 (20% OF THE LOAN)

Q0=6,400,000X20%+6,400,000X0.9X3.65%

(20% of the loan +handling fee)

n=12*30

i(A)^12=2.4%

r(A)=i(A)^12/12

For l =1,2,…,n

Q l =Q(l -1)*(1+r(A))-A1

Qn=0 PART 2

Q0=6,400,000X20%+6,400,000X0.9X3.65%

P=5%

For l=1,2,...n

rl= 2.4%/12

RAND()*((3.05%)-(2.4%))+(2.4%))/12)

A1=

(calculated from part1)

For l=1,2,...n

Q l =Q(l -1)*(1+r(A))-A1 If l <=60

Q l =Q(l -1)*(1+r(B))-A2 If otherwise

Qn=0 "Smart Easy" Top Up Mortgage A1 A2 total money paid total money paid =6400000*0.7 =B8*(1+$B$3)-$B$5 =6400000*0.2+6400000*0.9*3.65% =E8*(1+$E$3)-$E$5 =E1 =H8*(1+IF(G9<=60;$H$3;(RAND()*((3.05%)-(2.4%))+(2.4%))/12))-IF(G9<=60;$H$5;$H$6) Pengfei , a man who has worked in an IT company for 10 years , earns 60,000 HKD a month , is going to be married this year.

He wants to buy a new flat for his family. Mathematical model

mortgage part

p0=6400000 * 90%

ip= 5.250%

i12 = ip - 2.25%

r = i12 /12 T = 30

n = 30*12

for l = 1,2,...,n

pl = pl-1 *(1+ r) - A

pn = 0 A Another calculating spot! NOW,Consider that pengfei still has 1,000HKD after deducting 10% of minimum payment and in living

expenses . he wants to use these money for some investment!! 1.the plan3 offers the minimum p0 and total payment whereas the plan 2 offers the minimum monthly repayment

2.though the plan 3 seems to be the best chioce,in whole 30yrs, pengfei needs to put 3,600,000 into the savings account,which is not a small number. 1.IF pengfei can afford the loan 2 in 20 yrs , we suggest him choosing it

2. if couldn't, loan 2 in 20 is also a better choise than it in 30 yrs Group 13

Xu Peng Fei (12251054)

Ni Yuan (12250155)

Cheng Nan (12251208)

Tam Chi Leung (11014555)

Chan Pui Shan(10018700) savings part qn =C9*(1+IF(B10*0.5>C9,B$4,IF(AND(B10*0.5<C9,C9<500000),E$5,IF(AND(B10*0.5<C9,C9>500000),E$6,0))))+E$2 =6400000*90% =B9*(1+B$4)-B$5 $4,122,936.90 $9,435,978 $9,089,953

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