Let's break down the solution step by step as you requested: --- ### **Step 1: Introduction to the Concept** **Mortgage Amortisation** is the process of gradually paying off a loan (in this case, a mortgage) through regular scheduled payments. Each payment covers the interest on the loan and reduces the principal amount owed. The **amortisation schedule** details each payment, showing how much goes toward interest, principal, extra repayments, and the remaining balance after each payment. --- ### **Step 2: Answering Each Part of the Question** #### **a) Loan Details and Terms** - **Name of lender:** Westpac - **Start date:** 5-May-25 - **Total amount borrowed:** $799,065 - **Loan period:** 25 years - **Frequency of payment:** Fortnightly (every two weeks) - **No. of compounding periods per year:** 12 #### **b) Interest Rates and Repayments** - **Initial annual interest rate:** 179355.76% (Note: This is likely an error; typical rates are much lower, usually between 3–8%.) - **Interest in Years 6–10:** 5.14% - **Interest in Year 11 onwards:** 7.34% - **Additional repayment per period:** $19.25 #### **c) Amortisation Schedule Explanation** - Each row in the schedule shows: - **Payment Date:** When the payment is made. - **Beginning Balance:** Amount owed before this payment. - **Repayment:** Scheduled payment amount. - **Extra Repayment:** Any additional payment made. - **Interest:** Amount of the payment that goes toward interest. - **Principal:** Amount of the payment that reduces the loan balance. - **Ending Balance:** Remaining loan after payment. #### **d) Mortgage Summary** - **Scheduled initial payment:** $2,338.89 - **Fortnightly payment in Years 6–10:** $2,186.22 - **Fortnightly payment in Year 11 onwards:** $2,503.36 - **Total scheduled payments:** 650 - **Total actual payments:** 622 - **Total interest paid:** $717,040.74 - **Total cost of the loan:** $9,609 (This appears to be miscalculated; total loan cost should be principal + interest.) --- ### **Step 3: Final Summary (in Few Sentences)** The mortgage amortisation schedule details the process of repaying a $799,065 loan over 25 years with regular fortnightly payments. Interest rates change over the life of the loan, and extra repayments help reduce the balance faster. The total interest paid is $717,040.74, and the loan is fully paid off in 622 payments. --- ### **Step 4: What We Did in Each Step (Recap)** - **Step 1:** Introduced the concept of mortgage amortisation. - **Step 2:** Explained the loan details, interest rates, payment structure, and how the amortisation schedule works. - **Step 3:** Summarised the final outcome of the loan in a few sentences. - **Step 4:** Recapped the breakdown and logic followed in each step. --- **In summary:** We examined the loan's terms, understood how the payments are structured, interpreted the amortisation schedule, and calculated the total interest and payments over the life of the mortgage.