A construction company borrowed $10 Million from a bank to fund a construction project. They will make a balloon payment paying the full loan amount back, with interest, at the end of 8 years. The interest rate of this loan is 6% per year.

1. Draw the cash flow diagram from the construction company's viewpoint. [6 pts]
2. What will the balloon payment be at the end of year 8? [4 pts]
3. If the construction company had to recast the loan (extend it) by two years while maintaining the 6% yearly interest rate, how much more would they pay at the end of year 10? i.e. what would be the added cost of extending the loan by two years? [4 pts]
4. The bank has decided to offer an alternative payment schedule to the construction company: in lieu of a balloon payment at year 8, the construction company may choose to make annual payments of $2,250,000 per year for five years. What would the yearly interest rate of this new loan be? (be sure to show at least two decimal places) [6 pts]