I took FIN303 in the 1st semester of my 2nd year, which was a module that aimed to introduce core financial concepts e.g. TVM and shows us how to use these concepts to value financial assets and make sound business decisions. Applicable in a real-world working scenario, this module introduced how an analyst may decide on long-term expenditures, how to finance them as well as how to manage short-term operating activities.

For example, the TVM concept was introduced in the form of calculating the funding requirements for a housing purchase. In my proposal for the first question, the amortisation table shows an outstanding principal at the end of 13 months is $784,712.09. To calculate the outstanding principal at the end of each month, I had to first establish how much we will need to borrow from the bank. Since the condominium costs $1.2 million and the down payment is $400,000:

Condominium Price = $1,2000,000
Down Payment = $400,000
Amount Borrowed = $1,200,000 - $400,000 = $800,000

Since the interest rate for the loan is charged per annum basis, we need to find out the monthly rate as our payments are on a monthly basis. Now that we have our PV/Amount Borrowed, NPER & r, we will be able to find the monthly PMT amount. The Excel PMT function was used to find that the monthly PMT is $3,819.32.