Kim and Lee wish to buy a house and have it paid off in ten years. They have realised that at different stages of their life cycle they will have different capacities to make loan repayments.

Interest rate of loan that they have access to: J26 = 4.68% p.a.

Frequent International Holidays for two years - Max repayment of $800 per fortnight for fortnights 1 to 52

Regular domestic travel for four years - Max repayment of $1200 per fortnight for fortnights 53 to 156

Settled down homebodies - Max Repayment of $1500 per fortnight for fortnights 157 to 260

a) Assuming they make the maximum payments that they have budgeted for, illustrate the cash flows associated with the loan as a fully labelled time line diagram. (Assume the first repayment occurs one period after they take out the loan.)