Gabi wishes to purchase an apartment in Berea Johannesburg which is situated in a quiet street. The purchase price, including costs, is R355 000 and she wishes to obtain a 100% mortgage bond at an interest rate of 6%, interest compounded monthly. The term of the loan is 20 years. Property economists have suggested that property values are expected to rise at a rate of 9% per year. Gabi will be able to rent out the apartment after costs at a rate of R2 000 per month. Interest and rent are payable at the beginning of each month.
1 Calculate the expected value of the apartment in 20 years' time.
2 What is the mortgage loan repayment at the beginning of each month?
3 What is the net amount Gabi has to pay in each month, if any?