Question 1. Assume that you borrow a grant of $17,000 with a compounded interest rate of 1% per month and the term is 4 months. Please develop the cash flow diagrams for plan 1, plan 2, and plan 3 as discussed in Table 4-1 in the Payment plans module.

Hint. You will turn in three cash flow diagrams and you can just draw them by hand, scan and paste them to

the Word file.

no table

Table 4-11 Plan 1 Month Plan 3 Month Plan 2 Month (2) (3) (4) (5) (6) pay interest at the end of each month and principal at the end of contract Owed BoM Interest Owed EOM Principal Payment 1 $17,000 $17,170 $0 $170 $170 2 $17,000 $17,170 $0 3 $17,000 $170 $17,170 $0 4 $17,000 $170 $17,170 $17,000 (2) (3) (4) (5) pay interest and principal only the end of contract Owed BoM Interest Owed EoM Principal $17,000 $ 170.00 $17,170 $17,170 $ 171.70 $17,342 $17,342 $ 173.42 $17,515 $17,515 $ 175.15 $17,690 $ 690.27 (2) (3) (4) pay fixed amount monthly Owed BoM Interest Owed EOM $17,170.00 1 $17,000 $12,813.22 2 $12,941.35 3 $8,584,58 $8,670.42 $4,313.64 $4,356.78 1 2 3 4 4 170.00 128.13 85.85 43.14 0 0 0 $17,000 $ Y (5) Payment Principal $170 $170 $170 $17,170 (6) Payment $4,186,78 $4,228.65 $4,270.93 $4,313.64 0 0 0 17,690.27 (6) $4,356.78 $4,356.78 $4,356.78 $4,356.78 interest= PVK int rate= nper= FV= amb 1% $17,000 1% 4 0 ($4,356.78)