2. As an employee of Lemon Brothers Bank you are asked to create term loans that might appeal to potential customers. You are working on different structures for a 3 years loan of 5,000 at an interest rate of 4%. The Bullet loan structure consist of zero payments at the end of the first and second year and a final payment of 5,624.32 at the end of the third year.

a. Calculate the payments for a loan structure that includes interest only paid at the end of each year and a final repayment at the end of the third year. (5 marks)

b. Show one example of a Balloon-style repayment structure for the loan mentioned above. (10 marks)

c. Calculate the payments for a mortgage style repayment loan. (10 marks)