An amortized loan of 5000 is to be repaid with 20 monthly payments

starting one month after the loan. The first 10 payments are X each and

the following 10 payments are X, X(1.007), X(1.007)2, ..., X(1.007)9, respec-

tively. The nominal interest rate convertible monthly is i(12) = 12o/ for the

first 10 months and i(12) = 9o/ thereafter. 2o

(a) Find X and the total interest paid.

(b) What is the outstanding balance amount after the first 10 payments and the amount of interest paid in the 11th payment?

(c) Compute the outstanding balance amount just after the 18th payment is made using both prospective and retrospective methods.

(d) On the due date of the 16th payment, the loan is repaid in full with a single payment of Y . Calculate Y .