A businessman wishes to borrow an amount of $3 million for a term of 5 years. The agreed rate of interest is 5% per annum effective for the first 3 years, and 7% per annum effective thereafter. Repayment on the loan are made annually in arrears.

a) Find the amount of the level annual repayment

b) Draw up the loan schedule for the full five -year period

c) Calculate what percentage of the loan has been repaid by the end of year 3

d) Without doing any further calculation, explain how this percentage figure would alter if the rate of interest had instead being 7% for the first three years and 5% thereafter.