8. This question aims to demonstrate a critical application of ordinary annuities in real life-a fully amortized loan. Suppose you borrowed $5,000 at an annual interest rate of 6%, compounded annually. Assume you have to repay it over five years with equal amounts each year. Page 2 of 4 2 a) If the annual repayment is $1186.98, fill up the empty cells in the table below. b) Each yearly repayment is divided into two portions. One portion represents the principal paid, while the other portion indicates the interest payment. Does the interest payment each year increase or decrease over time? Why does this happen? c) How much do you owe the bank at the beginning of year 1(T=0), year 2(T=1), year 3(T=2), year 4(T=3) and year 5(T=4) ? d) Given your answer to part c), explain how the outstanding loan balance (or unpaid principal) at any point in time is related to the unpaid future periodic repayments. (Which formula regarding ordinary annuities should be used to answer this question?)