smith borrows 20000 to purchase a car. the car dealer finances the purchase and offers smith two alternative financing plans, both of which require monthly payment at the end of each month for 4 years starting one month after the car is purchased.

i)0% interest rate for the first year followed by 6% nominal annual interest rate compounded monthly for the following three years.

ii) 3% nominal annual interest rate compounded monthly for the first year followed by 5% nominal annual interest rate compounded monthly for the following three years. Find the monthly payment and the outstanding balance on the loan at the end of the first year.

for each of (i) and (ii) find the monthly payment and the outstanding balance on the loan at the end of the first year.