GROUP ASSIGNMENT COVER SHEET

STUDENT DETAILS

Student name: Võ Ngọc Minh Thảo Student ID number: WSU21000016

Student name: Trần Ngọc Phương Uyên Student ID number: WSU21000072

Student name: Chu Hà My Student ID number: WSU21000202

Student name: Lê Trần Bảo Hương Student ID number: B1112021286

Student name: Ma Thị Ngân Hà Student ID number: WSU21000368

Student name: Trần Phú Khang Student ID number: WSU21000065

UNIT AND TUTORIAL DETAILS

Unit name: Corporate Finance Unit number: CF-T322WSB-4

Tutorial/Lecture: Mrs. Le Thi Phuong Vy Class day and time: Friday: 12AM

Lecturer or Tutor name:

ASSIGNMENT DETAILS

Title: 72-hour Take-Home Exercises

Length: Due date: 12/10/2022 Date submitted: 12/10/2022

DECLARATION
√ I hold a copy of this assignment if the original is lost or damaged.

√ I hereby certify that no part of this assignment or product has been copied from any other student’s work
or from any other source except where due acknowledgement is made in the assignment.

I hereby certify that no part of this assignment or product has been submitted by me in another
(previous or current) assessment, except where appropriately referenced, and with prior permission
√ from the Lecturer / Tutor / Unit Coordinator for this unit.

√ No part of the assignment/product has been written/ produced for me by any other person except
where collaboration has been authorised by the Lecturer / Tutor /Unit Coordinator concerned.
 I am aware that this work may be reproduced and submitted to plagiarism detection software programs
for the purpose of detecting possible plagiarism (which may retain a copy on its database for future
√ plagiarism checking).

Student’s signature: Minh Thao

Student’s signature: Phuong Uyen

Student’s signature: Ha My

Student’s signature: Ngan Ha

Student’s signature: Bao Huong

Student’s signature: Phu Khang

Note: An examiner or lecturer / tutor has the right to not mark this assignment if the above declaration has
not been signed.
 CF – 72 hours homework
Monthly payments: $1518
original term: 30 years
interest rate: 8% (APR)
new mortgage term: 30 years, requires monthly payments
IR: 6% (APR)

a) What monthly repayments will be required with the new loan?

PV: original loan value
8%
�= 12
= 0.00667% ��� ����ℎ

n = number of periods
PMT = payment
-Using annuity formula:
1 − 1 + � −�
�� = �
�
−360
1 − 1 + 0.00667
=≫ $1518 ∗ = $206,878.34
0.00667
Remaining balance after 5 years is:
1+� �−1
�� ∗ 1 + � � − ��� ∗
�

60
1 + 0.00667 60 − 1
≪=≫ $206,878.34 ∗ 1 + 0.00667 − $1518 ∗
0.00667
=≫ $196,678.95
6%
- This is the amount of new interest rate is 12
= 0.5% = 0.005 ��� ����ℎ
−�
1− 1+�
�� = ��� ∗
�
−360
1 − 1 + 0.005
≪=≫ 196,678.95 = ��� ∗
0.005
���, ���. ��
=≫ ��� = = $�, ���. ��
� − � + �. ��� −���
�. ���
b) If you still want to pay off the mortgage in 25 years, what monthly payment should
you make after you refinance?
Using n = 300:
−�
1− 1+�
�� = ��� ∗
�
−300
1 − 1 + 0.005
=≫ 196,678.95 = ��� ∗
0.005
=≫ $�, ���. ��

c) Suppose you are willing to continue making monthly payments of $1518. How long
will it take you to pay off the mortgage after refinancing?
Using PMT = $1518
−�
1− 1+�
�� = ��� ∗
�
�
1 − 1 + 0.005
≪=≫ 196,678.95 = 1518 ∗
0.005
196,678.95 −�
≪=≫ 1 − ∗ 0.005 = 1 + 0.005
1518
−�
≪=≫ 0.3522 = 1 + 0.005
ln 0.3522
=≫− � = ln =− 209.25 ����ℎ�
1+0.005

=≫ � = ���. �� ������

d) Suppose you are willing to continue making monthly payments of $1518, and want
to pay off the mortgage in 25 years. How much additional cash can you borrow
today as part of the refinancing?
The loan amount you can borrow is:
−�
1− 1+�
�� = ��� ∗
�
 −300
1 − 1 + 0.005
≪=≫ �� = 1518 ∗
0.005
=≫ �� = $ 235,604.02
��� ���������� ������ ��� ��� ������ �� :
=≫ $���, ���. �� − $���, ���. �� = $��, ���. ��