Task 6 – Loan calculations

During a recent conversation with the owner of the business, you were informed that the business may be for sale in approximately 12 months’ time.  You decide to do a calculation to work out if you can afford repayments on a loan so that you can purchase the Café as your own.  

You estimate you will need approximately $45,000 to purchase the business and an additional $15,000 to renovate the kitchen.  You currently have $25,000 invested which you will use.    You would like to be able to repay the loan within 5 years.  The interest rate is 6% and the fees will be $25 per month.  

The following link will help you perform the calculation required: ASIC MoneySmart mortgage calculator 

Calculate the monthly repayment on this loan and write it below:

Monthly Loan repayment would be