How do i calculate this? What formula do I use?

You wish to purchase your first home. The bank will only allow a bond repayment, which is no greater than 30% of your net monthly salary. Your gross salary is $8250 per month and you have deductions of 25% per month from your salary.

Q: Calculate net salary (amount after deductions)

A: $6187.5

Q: Maximum bond repayment you can afford?

A: $1856.25

Q: The bank offers a fixed bond rate of 13,5% p.a. compunded monthly, over a 20 year period. Can you afford a flat that costs $150 000?

A: ???

Please show me how to calculate this. Thanks.

How do i calculate this? What formula do I use?construction loans

The payment will be $1810.5.

You can look up bond factors, i placed a link to a bond factor calculator. Using a bond factor makes the calculation easy.

PMT= PV/1000 * bond factor. or for you 150,000/1000*12.07

You could use a financial calculator by entering the data as N=240, I=13.5/12, PV=-150,000, FV=0, and then press calulate then PMT.

How do i calculate this? What formula do I use?

loan

John K is right. You can also find the solution using Excel. a financial calculator is easiest:

N = 20 years x 12 months = 240

PV = 150,000 - the amount of the loan today

i = 13.5% / 12 months = 1.125

FV = 0

You solve for the payment. Therefore the monthly payment is $1,811.06 well within your limit.