I. Suppose I borrow $1500 for 10 years. For the first 5 years the interest is a nominal rate of 3% compounded monthly, for the next 3 years the interest is a nominal discount rate of 3% compounded quarterly and for the last two years it has a constant force of interest of 3%.
a) What level payments every six months will pay off this loan?
b) What is the annual effective rate for this loan?
c) How much of the 8th payment is interest?
d) What do I owe after 12 payments?
II. Suppose I decide to payy off this loan by the sinking fund method with payments every six months. Assuming the sinking fund deposits earn a nominal rate of 3% compounded semiannually.
e) What will be the deposits into the sinking fund?
f) What is my annual effective rate?
Please show what work needs to be done to get these answers.