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Q3) Suppose Alberto borrows $10,000 from his friend, Consuela, who demands that the loan be paid back with QUARTERLY payments. However, Consuela wants to charge

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Q3) Suppose Alberto borrows $10,000 from his friend, Consuela, who demands that the loan be paid back with QUARTERLY payments. However, Consuela wants to charge Alberto an interest rate of 10% compounded SEMIANNUALLY. Given this scenario: a) Indicate the NOMINAL, PERIODIC (semi-annually) rate, PERIODIC (quarterly) rate, and EFFECTIVE ANNUAL interest rate for this situation. (5 pts) b) What QUARTERLY payment would Alberto need to make in order to completely pay off the loan in 5 years (20 payments), at the interest rate Consuela is charging? (5 pts) c)Suppose Alberto made the quarterly payments for the first 3 years (12 payments) in the amount calculated in part (b). But with the 12th regular payment, Alberto decides to pay off the remaining balance of the loan in full (i.e., -pay off Consuela with the exact amount owed at that point in time). What would Alberto's loan balance be (and therefore their 'full payoff" amount be) at the EOY 3? Include a CFD w/your calculations. (10 pts) Q3) Suppose Alberto borrows $10,000 from his friend, Consuela, who demands that the loan be paid back with QUARTERLY payments. However, Consuela wants to charge Alberto an interest rate of 10% compounded SEMIANNUALLY. Given this scenario: a) Indicate the NOMINAL, PERIODIC (semi-annually) rate, PERIODIC (quarterly) rate, and EFFECTIVE ANNUAL interest rate for this situation. (5 pts) b) What QUARTERLY payment would Alberto need to make in order to completely pay off the loan in 5 years (20 payments), at the interest rate Consuela is charging? (5 pts) c)Suppose Alberto made the quarterly payments for the first 3 years (12 payments) in the amount calculated in part (b). But with the 12th regular payment, Alberto decides to pay off the remaining balance of the loan in full (i.e., -pay off Consuela with the exact amount owed at that point in time). What would Alberto's loan balance be (and therefore their 'full payoff" amount be) at the EOY 3? Include a CFD w/your calculations. (10 pts)

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