6 FINA 3001 Fall 2021 Exercise #3 (8 points) Suppose you take out a 510,000 loan at a 8% APR compounded quarterly. The terms of the loan require you to make equal end-of-quarter payments each quarter for 4 years, and then an additional final payment of $5,000 four years from today. Part 1 What will your equal QUARTERLY payments be? (Assume your first quarterly payment is one quarter from today and your last quarterly payment is 4 years from today) Part 2 Now assume you make equal ANNUAL payments at the end of each of next four years. Assume the same rate used in part 1 How much would your payments be each year (assume there is no $5,000 payment at the end of year 4)? 6 FINA 3001 Fall 2021 Exercise #3 (8 points) Suppose you take out a 510,000 loan at a 8% APR compounded quarterly. The terms of the loan require you to make equal end-of-quarter payments each quarter for 4 years, and then an additional final payment of $5,000 four years from today. Part 1 What will your equal QUARTERLY payments be? (Assume your first quarterly payment is one quarter from today and your last quarterly payment is 4 years from today) Part 2 Now assume you make equal ANNUAL payments at the end of each of next four years. Assume the same rate used in part 1 How much would your payments be each year (assume there is no $5,000 payment at the end of year 4)