Following is the code that finds the payments of a $2,000,000.00 loan with 10% yearly interest compounded biweekly and 26 biweekly payments. Assume a year has 364 days.

clear format bank; syms r h n k p y0 assume(h > 0) assume(r > 0) y = (1 + r*h)^n * y0 - p*symsum((1 + r*h)^k, k, 0, n-1) %syms b %symsum(b^k * p, k, 0, n-1) ps = solve(y==0, p) y0 = 2000000; % Loan amount r = .10; % Annual interest rate h = 14/364; % Compounding period in years n = 26; % Number of payments double(subs(ps))

When answering questions, remember to use "format bank" and copy the exact answer as would be reported by MATLAB (for example, two digits after the decimal point). 1) What is the difference between the biweekly payments for the case the borrower pays the interest presented above and the case he/she does not pay any interest?

2) How much interest is due at the end of the first compounding period?

3) If the borrower is allowed to skip her first payment, what would the remaining 25 payments in the loan have to be?

4) Assuming the interest is now compounded daily, for a $2,000,000 loan, paid biweekly over 364 days (26 biweekly periods), yearly interest rate of 0.10 (i.e. 10%), what would be the biweekly payments? Consider a year has 364 days.