Kim and Lee wish to borrow $200,000 from the Unity Bank as a P&I loan, in order to buy an apartment. They intend to repay the loan over 15 years with regular fortnightly payments, with the first payment being one fortnight after they take out the loan. The Unity Bank charges interest at j26 = 4.94% p.a.

1. a) Illustrate the cash flows associated with this scenario as a fully labelled timeline diagram. [2 marks]

2. b) Determine the fortnightly payment size.