A company takes out a business loan of $500,000 at j2 = 4%. The loan is to be repaid with level semi-annual payments over ten years.

a) Generate the first 2 lines of the amortization schedule.

b) What is the interest portion of the eighth loan payment?

c) The company was able to make an extra payment of $50,000 at the end of five years. The balance of the loan is then refinanced at j2 = 3% (with no penalty) and the loan is still to be paid off over a total of ten years. What is the revised loan payment?

Please write down the formula used for answering the question. Please don't use Excel answering the question