Actuarial Report
6) After 5 investment models each of the variable mortgage loan (with an initial interest rate of 7.5% convertible monthly) and the fixed interest mortgage loan (fixed interest at 8.2%); the total repayments averaged:
Average Total Repayments of the Variable Interest Mortgage: $2484270.931
Average Total Repayments of the Fixed Interest Mortgage: $2452287.68
Therefore the variable interest mortgage has less repayments in total than
7) Actuarial Report
This report summarises Rudo’s investment cash flows from the 1st of February 2010, where she began work in an actuarial analyst role, to the 31st of May 2012. It also covers her prospective investment in the purchase of a property and her subsequent mortgage investment and financial strategies to purchase this property.
Her salary is modelled to be invested into an investment account that is linked to the 91 day BBSW rates, with the daily interest on the account being 100 basis points above the equivalent BBSW rate for any given day. Rudo begins work on the 1st of February 2010, a Monday, and is paid in arrears every second Thursday (the usual pay-bate in the workplace), so she has fortnightly deposits of $1000 up until the 31st of May 2012. This is when her last deposit of $1000 is credited into the account. Also assumed is that the interest on the account is credited according to the opening balance for that given day. This fortnightly deposit continues to accumulate interest daily according to the equivalent BBSW rates up until the 31st of December 2010, with the Saturday, Sunday and public holiday daily rates for 2010 assumed as being equal to the rate on the day before. At the 31st of December 2010 the balance on the account with these assumptions is modelled to be $23620.84. From the 1st of January 2011, the rates are then modelled to be lognormally distributed according to the equation riri-1~lognormal0,0.052. This creates the rates of any given month, and therefore the monthly rates could be higher
Average Total Repayments of the Variable Interest Mortgage: $2484270.931
Average Total Repayments of the Fixed Interest Mortgage: $2452287.68
Therefore the variable interest mortgage has less repayments in total than
7) Actuarial Report
This report summarises Rudo’s investment cash flows from the 1st of February 2010, where she began work in an actuarial analyst role, to the 31st of May 2012. It also covers her prospective investment in the purchase of a property and her subsequent mortgage investment and financial strategies to purchase this property.
Her salary is modelled to be invested into an investment account that is linked to the 91 day BBSW rates, with the daily interest on the account being 100 basis points above the equivalent BBSW rate for any given day. Rudo begins work on the 1st of February 2010, a Monday, and is paid in arrears every second Thursday (the usual pay-bate in the workplace), so she has fortnightly deposits of $1000 up until the 31st of May 2012. This is when her last deposit of $1000 is credited into the account. Also assumed is that the interest on the account is credited according to the opening balance for that given day. This fortnightly deposit continues to accumulate interest daily according to the equivalent BBSW rates up until the 31st of December 2010, with the Saturday, Sunday and public holiday daily rates for 2010 assumed as being equal to the rate on the day before. At the 31st of December 2010 the balance on the account with these assumptions is modelled to be $23620.84. From the 1st of January 2011, the rates are then modelled to be lognormally distributed according to the equation riri-1~lognormal0,0.052. This creates the rates of any given month, and therefore the monthly rates could be higher