[7] Question 2 [20 marks). A home loan of 100,000 is to be repaid over 20 years by equal monthly payments in arrears. (a) Show that the monthly payment amount is approximately 627 if the APR on the loan is 4.5% (b) Show that the capital outstanding on the loan after 8 years is 70,100 (after making the repayment due at that time). (e) After 8 years, the bank writes to the borrower offering to calculate the monthly repayment on a new basis. Under the new basis, the term of the loan is increased by 5 years and the interest rate increases to an effective rate of 5% p.a.. Determine the monthly repayment on the new basis. [7] [6]