A $300,000 loan is being repaid with equal monthly payments for 20 years at an interest rate of 10% compounded monthly per annum.

c) What is the outstanding balance at the end of the third year using both the retrospective and prospective methods?

d) Explain in detail how you would get your financial calculator to give you the answer in part (c).

e) Write down the Excel functions that would give you the answer in part (c).

f) What is the total interest paid for this loan?

g) Explain in detail how you would get your financial calculator to give you the answer in part (f).

Suppose now that the interest rate changes after the first year to 11% compounded monthly a year. [in order to obtain full points for the questions below you must show all work i.e., Excel reference will not merit credit].

h) Find the increased installment so that the loan is repaid at the end of the original 20 year term.

i) Find the term of the loan if the installment is not increased.

j) Calculate the amount of the last fractional payment.