QUESTION 2 (12 marks for final paper + 2 marks for milestones) Lee and Kerry borrow $400,000 from the TasWide bank, to be paid back through monthly repayments over 15 years, with the first repayment to occur one month after taking out the loan. TasWide charges at interest Jiz= 6.0% p.a. Under the terms of the loan, Lee and Kerry will pay interest only for the first 3 years of the loan. At that point the loan will change to a fully amortized (principal and interest or P&I) loan, which will apply for the final 12 years of the loan's duration a) Illustrate the cash flows associated with loan as a fully labelled timeline diagram. [2 marks] b) Determine the size of the monthly repayments during the first three years of the loan. Enter this value to 2 decimal places as an answer to "Assignment Module 1 - Milestones" question 2b. You can have as many attempts at this as you wish, but this question will close at 4:00pm on Wednesday 18 August. There will be no marks available for this question part after then. NB You do NOT need to include your workings for this question in your submitted assignment paper. [1 mark] c) Determine the size of the monthly repayments during the last 12 years of the loan. Enter this value to 2 decimal places as an answer to "Assignment Module 1 - Milestones" question 2c. You can have as many attempts at this as you wish, but this question will close at 4:00pm on Wednesday 18 August. There will be no marks available for this question part after then. NB You do NOT need to include your workings for this question in your submitted assignment paper. [1 mark] d) Find the Outstanding Principal immediately after Lee and Kerry's 177th repayment. [2 marks] e) Construct an amortization schedule showing the last 3 repayments. (Ensure that you show your working for one line of the amortization schedule.] [3 marks) f) Describe and perform and sanity check on your amortization schedule. (1+1 = 2 marks] g) If Lee and Kerry simply took out a 15 year P&I for $400,000 at jz = 5% p.a. and intended to make monthly repayments of $1900, attempt to determine how long they would take to pay off the loan. Explain why your attempt to answer the question was problematic