FINC19011 Business Finance Case Study: Loan and Investment Analysis

This document presents a comprehensive solution to a business finance case study (FINC19011), focusing on financial planning and loan calculations. The case study involves calculating the future value of a personal deposit, determining the amount required for a house loan after considering a personal deposit and a personal loan, calculating monthly repayments for the house loan, and creating an amortization schedule for the personal loan. The solution provides detailed formulas and calculations for each part of the case, including the future value of the initial deposit and monthly contributions, the total amount needed for the house purchase, and the monthly payments and interest breakdown for the loans. The amortization schedule illustrates the breakdown of principal and interest payments over the term of the personal loan. The case study provides a practical application of financial concepts, such as compound interest, present and future value, and loan amortization, making it a valuable resource for students studying business finance.

Running head: REPORT 0
FINC19011 business finance
JANUARY 9, 2020
STUDENT DETAILS:

REPORT 1
Answer (a)
Calculation of personal deposit at the end of 5 years –
Particulars Formula Amount ($)
personal deposit
at end of 5 years
FV(2.5%,60,1000,50
00) 157990.54
Answer (b)
Calculation of amount to be taken from a bank as the 25 years fixed interest house loan –
Particulars Amount ($)
Cost of house after 5 years
5,50,000
.00
Less: personal deposit at end of 5 years
1,57,990
.54
Less: 4-year fixed interest personal
loan
20,00
0.00
Amount to be taken from bank as 25
years fixed interest house loan
3,72,009
.46
Answer (c)
Calculation of monthly repayment for the house loan -
Particulars Formula Amount ($)
Monthly repayment for the house loan PMT(0.41%,300,372010,,0) 2157.43
Answer (d)
Amortization schedule for personal loan –
Payments Amount

REPORT 2
Monthl
y period
EMI Principal at starting Interest Principal Balance principal
1 $ 2,556.58 $ 20,000.00 $ 100.00 $ 2,456.58 $ 17,543.42
2 $ 2,556.58 $ 17,543.42 $ 87.72 $ 2,468.86 $ 15,074.56
3 $ 2,556.58 $ 15,074.56 $ 75.37 $ 2,481.20 $ 12,593.36
4 $ 2,556.58 $ 12,593.36 $ 62.97 $ 2,493.61 $ 10,099.75
5 $ 2,556.58 $ 10,099.75 $ 50.50 $ 2,506.08 $ 7,593.67
6 $ 2,556.58 $ 7,593.67 $ 37.97 $ 2,518.61 $ 5,075.06
7 $ 2,556.58 $ 5,075.06 $ 25.38 $ 2,531.20 $ 2,543.86
8 $ 2,556.58 $ 2,543.86 $ 12.72 $ 2,543.86 $ 0.00
Working note: Calculation of EMI
Particulars Formula Amount ($)
Instalments for the personal loan
PMT(0.5%,8,20000,,0
) 2556.58