2a) Assume you take a loan of $230,000. The loan is for 15 years, and the annual interest rate offered by bank is 5.50 per cent. If the cash repayment frequency is on quarterly basis and interest payment frequency is on monthly basis, calculate the number of repayments, effective annual rate, effective quarterly rate, and size of repayment on the loan amount. I have done some of the working below but do not feel the answer is correct. We are given the following details: Loan amount ($) = $230,000.00 Term of loan (years) = 15 Annual percentage rate (i = %) p.a = 0.055 Interest rate compounding frequency (m) = 12 Cash payment frequency (p) = 4

Q2a.	Use this column to state formula that you may consider to complete the yellow highlighted part on the right	Values
Number of repayments	NoR = Years * p	60
Effective annual rate:	EAR = (1+(i/m)^m-1	0.0564
Effective quarterly rate:	EQR = (1+(EAR)^1/p-1	0.0138
Size of repayment	SoR = Loan/[(1-(1+EQR)^(-NoR))/EQR]

2b) Complete the loan amortisation table using the format below showing all works clearly. (a few examples is fine)

Q2b.
Based on the above complete the loan repayment schedule below with titles of the table provided. Note insert as many rows as you think is relevant to complete the loan amortisation table
Period (quarter)	Balance at the beginning	Repayment	Interest	Balance at the end

2c) Explain when it is better to pay principal and interest on a loan versus just interest to pay off the loan if interest remain low for the first five years as in Q2b but lets assume the interest rate is expected to increase for the last ten years of a 15-year loan? Explain your reasoning