John Spencer has just negotiated a 10-year loan for his Elite restaurant. He borrowed $5,000,000 with a stated semiannual rate of 3% with payments due every 6 months. The loan allows him to refinance at the end of 3 years at an annual rate of 6% with payments to be made semi-annually.

Required:

1. Prepare a loan repayment schedule for the first 3 years.

2. Calculate the total interest expense for this loan over the first 3 years.

3. What is the balance on the loan at the end of 3 years?

4. If the loan is refinanced at the end of 3 years, what would be the new annual payment?