A- 1. Construct a loan amortization schedule for a $12,000,000 20-year loan, 8.45%. The loan requires equal payments at the end of the year and interest is compounded monthly.

- What is the total amount of interest paid over the life of the loan?

2. Reconstruct this amortization schedule assuming interest is compounded annually and payments are still made at the end of the year.

- What total amount of interest is paid over the life of the loan?

- What is the difference between those total amounts of interest?

3. Assume that in sections 1 and 2 above, there is a balloon payment requirement just after the tenth ( ^10th ) year annual payment

-What is the global payment in the section

-What is the balloon payment in Section 2?

-What is the difference between these amounts?

B.- 1. Build an amortization program for a loan of $3,500,000 over 3 years, made to

6.85% quoted annual rate. Interest is compounded daily and the loan requires equal monthly payments at the end of the term.

- What is the total amount of interest paid on this loan?