M4 Stage 2 Task Card

By Tayla
Chapter Questions- 1H, 1I and 1J
Chapter
1H and
1I
Chapter 1I and 1J
Chapter 1J
Step 2: Buying a home
 10% Deposit Stamp Duty

10% of 685,000 is $68,500. If I saved $300 Using a stamp duty calculator, the
a week it would take me just under 4 and a stamp duty is $22,810.
half years to pay it off.

68,500 divided by 300 = 228.3

228.3 divided by 52 = 4.4 years.

Current Interest Rates Weekly Rates

At NAB their current fixed interest rate for

a home loan is 3.99% p.a.
Step 3: Simple Interest
and Compound
Interest
Simple Interest

To work out simple Interest you use the formula…

I=PRT

I stands for interest (which is what we're trying to find out)

P stands for principal (amount of money)

R stands for rate (interest rate)

T stands for time (how many years/how long)

Using this information, you multiply your principal with the rate, then multiply that answer by the time. The current
answer that you have is the simple Interest.

With simple interest, the interest rate is the same every year no matter how much is in the bank.
 Compound Interest

Compound interest is different to simple Interest because instead of having a fixed amount of interest, the interest
depends on how much money is in your bank, so it is always changing.

For example… In the first year, if you have $100 in the bank and get 10% interest, you will have $110 by the end of
the year. However in the second year, instead of getting another 10% like simple Interest (so $120), you get 10% of
the amount of money in your bank (10% of $110 = $11), $121. So even though it's only a dollar extra by the second
year, gradually compound interest gets much higher as the years go on.

To calculate compound interest, you use the formula A= P ( 1 + r ) n

The A stands for the total amount, the P stands for principal as it does in simple interest, r stands interest per
payment and n stands for number of calculations.