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1.Your client's parents have a business with a loan of $5,000,000 repayable at the end of each year at a nominal rate of 9.5% p.a.,

1.Your client's parents have a business with a loan of $5,000,000 repayable at the end of each year at a nominal rate of 9.5% p.a., compounded monthly. The business now wishes to contemplate converting to payments on a quarterly basis. The loan is for 5 years. Your client would like to know:

(a)What is the current annual payment on theloan?

(b)What will be the payment if the business switches to payments at the beginning of each quarter?

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