exam questions

daku

well hello
Just need a little help on the answers to these questions as i have the cd disc and the paper exam but the results seem to be different on each :mad:
cheers.

Derek and Brenda, both aged 45, completed the purchase of their house on 5 November 2004 for £520,000. They have received a letter dated 18 June from their mortgage lender, the Poynton Building Society, confirming that two monthly payments have been missed.
The existing mortgage is on an interest only basis and Derek and Brenda are both investing in Equity Individual Savings Accounts with different providers to fund the final repayment of the mortgage. Brenda is investing in a mini account and Derek a maxi account. Brenda has not maximised her contributions, and paid £2,500 in the last tax year.
The main reason for the arrears is the collapse in Dereks bonuses from his high flying City job which he hopes will come on stream again in mid 2006.
Derek and Brenda have always spent all their income and, despite the high bonuses, after repaying mounting credit card debt, only have savings of £6,500, in excess of their earmarked mortgage repayment vehicles, now approached Davitts plc, their mortgage adviser as they have fallen into arrears.

question 1
if both derek and brenda had paid the maximum possible into their capital repayment vehicle over the last 4 financial yrs how much would have been paid to date:
a- 24k
b - 40k
c- 50k
d -56k

question 2:
if dereks bonuses do start again as aniticipated and brenda then increases her contribution to the max possible for her current type of mortgage repayment vehicle, by how much will her annual contribution increase?
a- 500
b- 3000
c- 4500
d- 7000


had derek and brenda approached davitts before addressing their other debts, a possible overall solution could have been

a- re-mortgaging
b- spreading the arrears
c- interest only repayments
d -a special claim fund

poppy10_2

1) 7k annual allowance x 4 years x 2 people=56k

2) 7k-2500=4500

3) remortgaging

Easy.

Robinhood

Dont take my word for it but below is what I think.

1. Brenda's mini account = 3K max per year x 4yrs = 12K
Derek's maxi account = 7K max per year x 4yrs = 28K
Therefor answer = 40K

2. Allowance for her type of accouint is £3K
Allready paying 2.5K
Therefor payments would increase by £500.

3. Remortgage

Mr_helpful

1) B

2) A

3) B remortgaging unlikely as in arrears

daku

hmm.. this is where i am confused , it states that they are both using equity iSa's, so isn't the max contribution for a mini equity isa 4k???

daku

i went for spreading the arrears to, but on the answer papers it says remortgaging :mad:

Mr_helpful

remortgaging with 2 months unsat arrears would cost them about 4% more with some outfit like SPML
I thought mini isa was 3K so 3 + 7 = 10 X4 =40 KNowing these papers Equity is the provider of the ISA just to confuse you

Just shows you cant get good advice from the examiners either