Consider a fixed rate constant payment 6-year mortgage with annual payments. The interest rate is 8.5% per annum and the principal (or loan) amount is $7575.

a. What is the annual payment to amortise the loan? (Answer in 4 decimal places)

b. How much of that payment is for interest and how much is for principle in year 1? Show the calculation how you got the answer.

c.What is the loan balance at the end of year 2? Show the calculations how you got the answer