1.
The Tower of Babel
Summative Activity and Assessment Plan
Professor: Jamie Pyper
Students : Jonathan Blankson
Ihsan Rehman
Mihaela Tingire
Section 003
2.
Table of Contents
Overview.............................................................................................................................................3
Background Information.....................................................................................................................3
Teacher Instructions ...........................................................................................................................4
Day #: 1 Topic: Canada Savings Bond...............................................................................................5
Day #: 2 Topic: The Budget Sheet.....................................................................................................6
Day #: 3 Topic: The Cost of Credit...................................................................................................7
Worksheet 1........................................................................................................................................8
Worksheet 2......................................................................................................................................10
Game Worksheet...............................................................................................................................11
Worksheet 3......................................................................................................................................12
Solutions: Worksheet 1.....................................................................................................................13
Solutions: Worksheet 2.....................................................................................................................15
Game Sheet Solutions.......................................................................................................................16
Solutions: Work Sheet 3...................................................................................................................18
2
3.
Overview
This summative activity is for the grade 11 College preparation, Mathematics of Personal Finance,
MBF3C. This course enables students to broaden their understanding by investigating income
opportunities, interest analysis, mathematics of financial growth, sequences and series and their
financial applications, mathematical calculations related to finance of real world projects like
transportation, accommodation, automobiles and managing their money, career choices and a
summative unit on planning the student’s financial future.
At a point in time of our lives we are left to make decisions which affect us for the rest of our lives
and college level students are no exception. They have to make informed decisions on whether or
not they are going to run their own business, rent or buy a house, lease or buy a car, etc. Therefore,
each student will use the mathematics presented in this course throughout their lifetime.
This summative assignment covers "Exponential Functions", "Financial Applications" involving
"Simple and Compound Interests" and "Annuities".
The main objectives of our summative activity refer to the students' abilities to :
• Make informed decisions about "Canada Savings Bond"
• Solve problems involving simple and compound interests and annuities
• Solve and making decisions on problems involving leasing or buying properties
• Prepare a budget sheet for a small company
Background Information
"A small city, Babel, which was struggling economically decided to take the
world by storm by building a very big and tall tower (which they aimed to
make it more attractive than the famous Tower of Paris) to attract tourists
and travelers alike to the city in order to boost their economy. A committee
was set to make this wonderful dream come through. After first meeting the
committee approached a Scotia Bank to let them know what they were
doing so that as soon as they finished their estimate they could get a loan
from them. But the Scotia Bank asked them to raise funds and invest in the
Canada Savings Bond to get some capital before they could lend them the
rest of the money needed for the project and they have to submit their
budget to show that the project would be profitable."
3
4.
Teacher Instructions
This summative unit is broken into three days as it follows :
Day Activity K/U TIPS CO APP
1 Canada Savings Bonds 4 - 5 10
2 The Budget Sheet/Game 5 - 9 25
3 The Cost of Credits - - 5 20
• All the teaching and learning strategies are outlined in the daily lesson plans
• Student worksheet handouts are featured for each of the three days
• The assessment strategies (marking schemes and rubrics) as well as the solutions for
each activity are provided under the Solutions section of this document.
Note:
The Game Sheet is part of Day #2. Students should be given the background information below.
The amortization tables are part of the solutions; in order to receive full marks the students should
implement and submit them using spreadsheet software (e.g. MS Excel)
Background Information
A small city, Babel, which was struggling economically decided to take the world by storm by
building a very big and tall tower (which they aimed to make it more attractive than the famous
Tower of Paris) to attract tourists and travelers alike to the city in order to boost their economy. A
committee was set to make this wonderful dream come through. After first meeting the committee
approached a Scotia Bank to let them know what they were doing so that as soon as they finished
their estimate they could get a loan from them. But the Scotia Bank asked them to raise funds and
invest in the Canada Savings Bond to get some capital before they could lend them the rest of the
money needed for the project and they have to submit their budget to show that the project would
be profitable.
4
5.
LESSON PLAN MBF3C Mathematics of Personal Finance
Day #: 1 Topic: Canada Savings Bond
REVIEW HANDOUTS / TECHNOLOGY
Simple interest and compound interest • Worksheet 1: Canada Saving Bond Activity
• Computers connected to the internet
TEACHING EXPECTATIONS
Students will :
• Know and distinguish between various Canada Savings Bond types
• Solve problems involving the simple interest formula (I=Prt)
• Solve problems involving the calculation of the amount (A) and the principal (P) in
the compound interest formula A = P(1+i)n
CURRICULUM REFERENCES
The Ontario Curriculum Grades 11 and 12 Science, 2000 pg. 29
LESSON OVERVIEW
This activity should be done in a computer lab or classroom with computers connected to
the Internet. Students can work independently or in a group of two or more depending on
the number of computers available. A brief review of formulae involving the simple
interest and compound-interest would be advantageous for the students. As well,
students may be allowed to quietly converse in pairs on the problems as they require total
understanding to correctly use the given formulas. The teacher should make sure that all
students have logged on to Canada Savings Bond web site following the link given on the
worksheet. The teacher should be available throughout this work period to clarify any
problems the students might have.
METHOD OF ASSESSMENT
This period will be formally evaluated as part of the total assignment mark. The
assessment includes a marking scheme : Knowledge - 4 marks, Application -10 marks,
Communication - 5 marks and a rubric based on four levels for the evaluation of the
thinking and communication skills.
ENRICHMENT REMEDIATION
• Question 3 can be modify using • Give students extra time if they require
different interest rates or they can complete the work at home
• Draw a graph to compare the and submit it the next day
accumulated interest earned after • Guide students to organize the chart
each year for the two types of
regular or compound interest bonds
5
6.
LESSON PLAN MBF3C Mathematics of Personal Finance
Day #: 2 Topic: The Budget Sheet
REVIEW HANDOUTS / TECHNOLOGY
The concepts of present value and regular • Worksheet 2: The Budget Sheet Activity
payment in the formula for the present • Game Sheet
value of an ordinary annuity. • Computers with spreadsheet software or
TI-83 Plus calculators
TEACHING EXPECTATIONS
Students will :
• Design a budget suitable for a small company
• Explain and justify budgets, using appropriate mathematical forms
• Compare the cost involved in buying or leasing the same vehicle or office
CURRICULUM REFERENCES
The Ontario Curriculum Grades 11 and 12 Science, 2000 pg. 31
LESSON OVERVIEW
This activity can be done in a computer lab or classroom with computers (with spreadsheet
software) or TI-83 Plus calculators can be used. Students can work independently or in groups of
two or more, depending on the number of computers or TI-83 Plus calculators available. A brief
review of formulae that are important for the calculation of the regular payment and the present
value in the formula for the present value of an ordinary annuity would be helpful for the students.
As well, students may be allowed to quietly converse in pairs on the problems as they require
total understanding to correctly use the formulas given. The teacher should be available
throughout this work period to clarify any problems the students might have. For the game part
(i.e., if the students finish early) the teacher should divide students into four home groups. Two
people in each home group are going to become experts on one question on the game sheet. The
two experts for, say question #1, from each home group move to the same table to solve question
#1. The same for question #2 and so on. After mastering their topic, the two experts for each
question move to their home group to share their solution in turns with the rest of their group.
Each home group submits one solution and all group members receive the same mark.
METHOD OF ASSESSMENT
The teacher will formally assess the students, using a marking scheme: Knowledge - 5 marks,
Application - 25 marks, Communication - 9 marks and a rubric based on four levels for the
evaluation of the thinking and communication skills.
ENRICHMENT REMEDIATION
• Have students to research to come out • Give students extra time if they required
with the cost of building a tower bigger • Guide students to come out with good
than that of Paris and reasonable expenses relative to the
• More problems can be added to the company in question
game sheet
6
7.
LESSON PLAN MBF3C Mathematics of Personal Finance
Day #: 3 Topic: The Cost of Credit
REVIEW HANDOUTS / TECHNOLOGY
The present value and the regular payment • Worksheet 3: The Cost of Credit Activity
in the formula for the present value of an • Computers with spreadsheet software or
ordinary annuity TI-83 Plus calculators
TEACHING EXPECTATIONS
Students will:
• Solve problems involving the calculation of the present value and the regular
payment in the formula for the present value of an ordinary annuity
• Build an amortization table for repayment schedule to calculate the total interest
paid on loans
• Know and make decisions on good loan deals
CURRICULUM REFERENCES
The Ontario Curriculum Grades 11 and 12 Science, 2000 pg. 29
LESSON OVERVIEW
This activity can be done in a computer lab or classroom with computers (with
spreadsheet software) or TI-83 Plus calculators can be used. Students can work
independently or in groups of two or more depending on the number of computers or TI-83
Plus calculators available. A brief review of formulae that are important for the calculation
of the present value and the regular payment in the formula for the present value of an
ordinary annuity would be helpful for the students. As well, students may be allowed to
quietly converse in pairs on the problems as they require total understanding to correctly
use the given formulas. The teacher should be available throughout this work period to
clarify any problems the students might have.
METHOD OF ASSESSMENT
This period will be formally evaluated as part of the total assignment mark, using the
following marking scheme: Application - 20 marks and Communication - 5 marks.
ENRICHMENT REMEDIATION
• Have students solve problems • Give students extra time if they require
involving different interest rates and • Guide students to make the repayment
deals schedule
7
8.
Worksheet 1
Canada Savings Bond Activity MBF 3C
Name: Due Date:
Information is found at the following link: www.csb.gc.ca/eng/ then go to Bonds and Rates then
go to Canada Savings Bonds or
Canada Premium Bonds. Many
Questions can be answered at FAQ
1. What are Canada Savings Bonds? CO [ /2]
2. For each of the two main product types of Canada Savings Bonds, generate a chart that
includes the following heading: CO and TIPS (the rubric is provided in the Solutions section )
a) Bond Types
b) Types of interest options available for Canada Savings Bonds
c) Current Rates for each bond type
d) Redeemable Period
e) Who is eligible to own Canada Savings Bonds?
f) Where you can purchase the Bonds?
g) Range of the values of Bonds purchases.
3. The rate of a CSB (Canada Savings Bonds) is 3.90% and for CPB (Canada Premium Bond)
is 4.70%. Suppose the Tower of Babel committee were able to raise some funds and
decided to invest $ 50, 000 in each of the four types of bonds available and will be
redeemed at maturity in 5 years.
a) Determine the total interest they will earn for each investment APP [ /10]
b) Determine the difference in the total interest earned for the regular interest CSBs
and the regular interest CPBs K/U [ /2]
c) Determine the difference in the total interest earned for the compound interest CSBs
and the compound interest CPBs K/U[ /2]
8
9.
d) Explain why the differences in parts b) and c) are not the same CO [ /3]
9
10.
Worksheet 2
The Budget Sheet Activity MBF 3C
Name: Due Date:
The Tower of Babel committee needs money to build the tower, to buy or to lease
company’s cars, to rent or to buy offices, etc. After considering all these factors they
saw that they needed $2,000,000 besides the initial capital they raised and put in the
Canada Savings Bonds. But before they can get a loan from the bank, they are
required to submit their monthly budget report to the bank, so that the bank could
evaluate the business 's credibility (based on the monthly profit).
Based on the committee’s research, they estimated that on the average the company is going to
receive 20,000 visitors in a month and they plan to charge $5 per visitor. Assuming this is the only
source of income for the company;
1. Calculate the total revenue of the company K/U [ /2]
2. Prepare a monthly budget sheet for the company. Note: use the sample Monthly Budget
Worksheet on page 364 of your textbook as a guide (you may use the spreadsheet to
prepare the budget sheet for convenience) CO and TIPS
3. Calculate the total expenses of the company K/U [ /3]
4. Determine the difference between the total revenue and the total expenses. This is the net
income for the company APP [ /5]
5. Based on your budget sheet explain whether the company is going to be profitable or not.
CO [ /5]
10
11.
Game Worksheet
1.
Demonstrate, through calculation, the advantages of early deposits to long-term
savings plans (e.g., compare the results of making an annual deposit of $1000
to an RRSP, beginning at age 20, with the results of making an annual deposit
of $3000, beginning at age 50) APP[ /5]
2.
Ali is going to buy or lease a new car which cost $25000. To lease, he has to
pay 550 per month for 5 years. To buy, he has to finance the car at an
interest rate of 2%, compounded monthly over 5 years.
a) Find the monthly payment required. PP [ /5]
b) Determine whether he should buy or lease CO [ /2]
3.
Mary and John have rented a 2 bedroom apartment for 5 years. They are paying
the rent and the utilities. Since they are expecting their first child, they are
considering buying a house. They saved $3,000 last year and $2,500 the year
before, for their down payment.
Apartment Costs House Costs
Rent: $1,150/month Mortgage: $260/week
Gas: $900/year Electricity: $230/month
Electricity: $550/year Water: $55/month
Apt Parking: $30/month Property Taxes: $1980 / year
Should they buy the house? Justify your answer. App [ /5] and CO [ /2]
4.
Jill needs $1,200 two years from now. How much should she deposit at the end of
each quarter for next two years in an account that pays 4% compounded interest
quarterly. APP [ /5]
11
12.
Worksheet 3
The Cost of Credit Activity MBF 3C
Name: Due Date:
After the Tower of Babel committee submitted their budget, the Scotia Bank saw that the project
was going to be great and more importantly, all things being equal, the project would make a lot of
profits.
The Scotia Bank offered to give the project committee a loan of $ 2,000,000 for 5 years at a rate of
6% compounded monthly. But the TD Canada Trust Bank heard about the deal and decided to give
the project committee a 2% cash back of the loan as soon as they sign up for the loan. Also, their
deal includes a loan of $2,000,000 for 6 years at a rate of 7.5% compounded monthly.
Using the information given about the two banks above:
a) Calculate the monthly payment of the Scotia Bank deal APP [ /3]
b) Calculate the monthly payment of the TD Canada Trust deal. APP [ /3]
Use the monthly payment for each deal respectively to do the following:
c) Build an amortization table for the repayment schedule for the Scotia Bank deal using a
spreadsheet or a TI – 83 Plus calculator APP [ /5]
d) Build an amortization table for the repayment schedule for the TD Canada Trust Bank deal
using a spreadsheet or a TI – 83 Plus calculator APP [ /5]
e) Calculate the total interest paid on the loan for each deal APP [ /4]
f) Write a short note to advice the project committee the best deal to consider CO [ /5]
12
13.
Solutions: Worksheet 1
1. Canada saving bond is a financial product issued by the Bank of Canada. It offers a competitive
rate of interest and guarantees a minimum interest rate .Now these bonds include two product
types:
The Canada Savings Bond (CSB)
The Canada Premium Bond (CPB) CO [ /2]
2.
Bond Types The Canada Savings Bond The Canada Premium Bond
(CSB) (CPB)
Interest Options • Regular Interest • Regular Interest
• Compound Interest • Compound Interest
Current Rate • Year 1 - 2.0% • Year 1 - 2.5%
• Year 2 - 3.25%
• Year 3 - 4.0%
Redeemable Period Any time Only on the anniversary of the
issue date and for 30 days
thereafter
Eligibility The CSB may be owned by The CPB may be owned by
Canadian residents. Federal Canadian residents. Federal
and provincial government and provincial government
employees, including armed employees, including armed
forces personnel and their forces personnel and their
immediate family, stationed immediate family, stationed
outside the country may also outside the country may also
purchase the CSB. purchase the CPB.
Where you can Can be purchased online for ease Can be purchased online for ease and
Purchase and convenience. The CSB can also convenience. The CPB can also be
be bought wherever you bank or bought wherever you bank or invest,
invest, or by calling or by calling 1 888 773-9999.
1 888 773-9999. The CSB can also
be purchased through payroll
deduction where available at
sponsoring employers.
Range of Values You can buy a CSB for as little You may buy a CPB for as little
as $100 – or for as little as $2 as $100. The maximum amount
per week on the Payroll you can generally own per series
Savings Program. The is $500,000 per type of
maximum amount you can registration (for exceptions,
generally own per series is please refer to the terms and
$500,000 per type of conditions).
registration (for exceptions,
please refer to the terms and
conditions).
See the rubric below for the assessment of the communication and thinking skills.
13
14.
Rubric for Worksheet 1
Level 1 Level 2 Level 3 Level 4
Chart uses some of
Chart uses little of Chart uses many of Chart uses all of the
the correct data and
Communication the correct data and the correct data and correct data and is well
is satisfactorily
is poorly organized is organized good organized
organized
Summary and Difficult to follow Useful info; good Well presented; strong
rationale unclear or interpret . format. reflection of ministry
Poorly written Few spelling or Well written. expectations
Thinking/Inquiry grammar errors. Some variety in High quality composition.
Adequate presentation of Enhanced presentation of
presentation of information. information.
information
3. (a) Given the principal, P = $ 50,000, and the time, t = 5 years
For CSB we have the rate, r = 3.90% APP [ /5]
• To calculate the regular interest, use the formula, I = Pr t
I = (50,000)(0.039)(5)
I = $ 9,750
therefore, the regular interest for the CSB is $ 9750
• To calculate the compound interest rate, use the formula, A = P (1 + i )
n
P = 50,000, t = 5, i = 3.9%
A = 50,000(1 + 0.039)5
A = $ 60,540.742 using a calculator .
So, interest, I is
I=A-P
I = 10540.742 - 50000
I = $10540.74
therefore, the compound interest for the CSB is $ 10540.74
For CPB we have the rate, r = 4.70% APP [ /5]
• To calculate the regular interest, use the formula, I = Pr t
I = (50000)(0.047)(5)
I = $11,750
therefore, the regular interest for the CPB is $ 11750
• To calculate the compound interest rate, use the formula, A = P (1 + i )
n
P = 50,000, t = 5, i = 4.7%
A = 50,000(1 + 0.047)5
A = $62,907.643 using calculator
So, interest, I is
I=A-P
I = 62,907.643- 50,000
I = $ 12907.64
therefore, the compound interest for the CPB is $ 12907.64
3. (b) The difference in the total interest earned for the regular interest CSBs and the regular interest
CPBs is $ 11750 - $ 9750 = $ 2000 K/U [ /2]
3. (c) The difference in the total interest earned for the compound interest CSBs and the compound
interest CPBs is $ 12907.64 - $10540.74 = $ 2366.90 K/U [ /2]
3. (d) The difference in parts (b) and (c) are not the same because for regular interest the interest is
calculated only once on the principal amount whereas, for compound interest the interest is calculated
on both the principal amount and the interest earned. CO [ /3]
14
15.
Solutions: Worksheet 2
1. The total revenue of the company is: K/U [ /2]
(number of visitors) x (ticket price) = 20,000.00 x 5
= $ 100,000.00
2. The monthly budget sheet may look like the one below but not exactly the same.
Monthly Budget Sheet
Revenue
Number of visitors 20000
Ticket Price $ 5.00
Total Revenue $ 100,000.00
Expenses
Electricity $ 400.00
Gas $ 300.00
Office Supplies $ 200.00
Property Tax $ 1,500.00
Cleaning Staff $ 8,000.00
Secretarial $ 2,200.00
Managers $ 16,500.00
Advertisement $ 12,000.00
Repairs Cars $ 300.00
Insurance $ 350.00
Repairs $ 300.00
Equipment Repairs $ 1,500.00
Postage $ 150.00
Rent $ 3,087.00
Equipment $ 4,000.00
Gas Cars $ 550.00
TotalExpenses $ 51,337.00
Net Income 48,663.00
Rubric for Worksheet 2, Part 2 - assessment of Communication and TIPS
Level 1 Level 2 Level 3 Level 4
Communication Budget sheet is Budget sheet is Budget sheet is Budget sheet is
poorly organized satisfactorily organized well organized excellently organized with
with poor use of with adequate use of with good use of excellent use of
assumptions assumptions assumptions assumptions
Rationale unclear Difficult to follow or Useful info; good Well presented; strong
And poorly interpret . format. reflection of budget in
related to the Few spelling or Well written. question.
Thinking/Inquiry budget in grammar errors. Some variety in High quality composition.
question. Adequate presentation presentation of Enhanced presentation of
of budget in question. budget in question. budget in question.
15
16.
3. The total expenses of the company is $ 51,337.00 (note: this should base on how they prepare the
budget sheet). K/U [ /3]
4. The net income of the company is:
(total revenue) - (total expenses) = 100,000.00 - 51,337.00 APP [ /5]
= $ 48,663.00
5. Based on the results in the worksheet we can conclude that the company will be profitable, with a net
income of $ 48,663.00 monthly. CO [ /5]
Game Sheet Solutions
1. Lets assume that the annual interest rate is 8%, the retirement age is 60 years, the saving process starts
at age 20 years with an annual deposit of $1,000. Then we have a regular deposit R=1,000, an interest
rate i=0.008 and a number of deposits n=40. APP [ /5]
R[(i + 1) n − 1]
∴ the amount, A=
i
[(1 + 0.08) 40 − 1]
= 1,000 .
0.08
= 25,9056.519
A ≈ $ 25,9056.52
Also, for the deposit of $3,000 annually at age 50 we have R=3000, i=0.08, n=10.
R[(i + 1) n − 1]
∴ the amount , A=
i
3,000 ⋅ [(1 + 0.08)10 − 1]
=
0.08
= 43,459.687
A ≈ $43,459.69
Therefore, from the calculations we can see that the early deposit is more advantageous than the long-
term savings plan.
2. (a) The car's present value, V=$25,000.00 APP [ /5]
2% •
Monthly interest rate i = = 0.0016 6
12
Number of deposit n = 12 x5 = 60
The monthly payment is calculated using the formula :
( PV )(i )
R=
1 − (i + 1) −n
•
25,000 ⋅ (0.00166 6)
= •
1 − (1 + 0.00166 6) −60
= 438.192
R ≈ 438.19
∴ the monthly payment is $438.19.
(b) He should buy because the monthly payment $438.19 > $450 and also he is going to own the car as
his property. CO [ /2]
16
17.
3. APP [ /5]
Apartment Cost/year House Costs/year
Rent $1150 x 12=13,800.00 Mortgage $260.00 x 52=$13,520.00
Gas $900.00 Electricity $230.00 x 12=$2,760.00
Electricity $550.00 Water $55.00 x 12=$660.00
Apt. Parking $30.00 x 12=$ Property Taxes $1,980.00
360.00
Total $15,610.00 Total $18,920.00
They should buy the house because the difference between the costs (monthly/yearly) of the two
options is not too much. Also, when they buy the house, it will be their own property , which
they can sell at a later date CO [ /2]
4) Given the amount, A=$1,200.00, APP [ /5]
the number of quarterly deposit, n=4 x 2=8,
4%
the quarterly interest, i = = 0.01
4
A⋅i
The regular deposit, R =
[(1 + i ) n − 1]
1,200.00 ⋅ (0.01)
=
[(1 + 0.01) 8 − 1]
= 144.828
≈ 144.83
∴ Jill should deposit approximately $144.83 at the end of each quarter.
17
18.
Solutions: Work Sheet 3
(a) APP [ /10] including the table in part (c)
Present value is: PV = $2,000,000
Interest rate = 6%
0.06
The interest rate compounded monthly is: i=
12
The number of payments is: n = 12 × 5 = 60
To determine the monthly payment, use the following formula :
R[1 − (1 + i ) − n ]
PV =
i
0.06
( )(2,000,000)
iPV 12
⇒R= = = $38,665.60
[1 − (1 + i ) − n ] 0.06 −60
[1 − (1 + ) ]
12
So, monthly payment is $38665.60
Note: this part is for part (e),or they can quote the value from amortization
table
To find the total interest paid, we have:
Total amount paid for 5 years = 38665..60 × 60
= 2319936.18
Therefore, total interest = 2319936.18 - 2000000
= $ 319936.18
18
19.
(b) APP [ /10] including the table in part (d)
The loan is $ 2000000 but they are going to get 2% cash back
2
2% of 2,000,000 = × 2,000,000
100
= $ 40,000
So, the present value (PV) of the loan = 2,000,000 - 40,000
PV = $ 1,960,000
7.5%
The monthly interest rate (i) =
12
= 0.00625
The number of monthly payment (n) = 12 × 6
= 72
Now we can calculate monthly payments by the formula;
R[1 − (1 + i ) − n ] iPV
PV = ⇒ R=
i [1 − (1 + i ) − n ]
By substituting the values PV = 1960000, i = 0.00625, n = 72
(1,960,000)(0.00625)
R=
[1 − (1 + 0.00625) 72 ]
12,250
=
0.361478276
= 33,888.62
So, monthly payment is $ 3,388.62
Note: this part is for part (e),or they can quote the value from amortization.
table
The total amount paid for 6 years = 33,888.62 × 72
= 2,439,980.64
Total interest = 2,439,980.64 - 1,960,000
= $ 479,980.64
19
20.
c) Amortization Table- Scotia Bank
Present value (Loan) 2000000
Annual interest rate 0.06
Amortization period (years) 5
Monthly payment 38665.60
Total payments 2319936
Present Outstanding
Payment Number Monthly Payment Interest Paid
Value Paid Balance
0 2,000,000.00
1 38,665.60 10,000.00 28,665.60 1,971,334.40
2 38,665.60 9,856.67 28,808.93 1,942,525.47
3 38,665.60 9,712.63 28,952.97 1,913,572.50
4 38,665.60 9,567.86 29,097.74 1,884,474.76
5 38,665.60 9,422.37 29,243.23 1,855,231.53
…
54 38,665.60 1,326.63 37,338.97 227,987.48
55 38,665.60 1,139.94 37,525.66 190,461.82
56 38,665.60 952.31 37,713.29 152,748.53
57 38,665.60 763.74 37,901.86 114,846.67
58 38,665.60 574.23 38,091.37 76,755.30
59 38,665.60 383.78 38,281.82 38,473.48
60 38,665.60 192.37 38,473.23 0.25
Total Paid Interest 319,936.25
d) Amortization Table- TD Bank
Loan 2000000
CashBack 0.02
Present value (Loan) 1960000
Annual interest rate 0.075
Amortization period (years) 6
Monthly payment 33888.62
Total payments 2439980.64
Present Value Outstanding
Payment Number Monthly Payment Interest Paid
Paid Balance
0 1,960,000.00
1 33,888.62 12,250.00 21,638.62 1,938,361.38
2 33,888.62 12,114.76 21,773.86 1,916,587.52
3 33,888.62 11,978.67 21,909.95 1,894,677.57
4 33,888.62 11,841.73 22,046.89 1,872,630.68
5 33,888.62 11,703.94 22,184.68 1,850,446.00
…
67 33,888.62 1,243.48 32,645.14 166,311.83
68 33,888.62 1,039.45 32,849.17 133,462.66
69 33,888.62 834.14 33,054.48 100,408.18
70 33,888.62 627.55 33,261.07 67,147.11
71 33,888.62 419.67 33,468.95 33,678.16
72 33,888.62 210.49 33,678.13 0.03
Total Paid Interest 479,980.67
(f) Even though the TD Canada Trust Bank deal give 2% cash back and also the period the loan is to be paid is longer (6
years compared to 5 years), the interest they have to pay on the loan is bigger than that of Scotia Bank deal. Therefore,
the Scotia Bank deal is better to consider. So I will recommend that the committee should consider the Scotia Bank
deal. CO [ /5]
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