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  • 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] 20