There are four options of a loan payment scheme

1. Upfront payment of $4700

2. Over a 36 month plan with $140 per month paid at the end of each month

3. Payment of $5,600 at the beginning of the third year

4. A monthly payment of $250 per month, starting from today and a final payment being made 17 months from today.

Interest rate applicable is 8% p.a. compounded monthly.

Compare Options 3 and 4 for parts c) and d) below;

1. if you wish to make monthly payments in Option 4 at 8% p.a., what is the payment amount that would make you indifferent between Option 3 and 4.

2. If the monthly payment of Option 4 were made at the end of each month, how would your answer to part b) on the monthly payment amount be different. EXPLAIN WITHOUT ANY CALCULATIONS.

3. You chose Option 3 to purchase a hi-fi stereo set-up. Six months later after having commenced making payments, market interest rates change. Would this change have made your decision better off or worse off, if

   1. Market interest rates were to rise and if

   2. Market interest rates were to fall.

EXPLAIN WITHOUT ANY CALCULATIONS

This was all the information given in the question.

A quick response would be greatly appreciated! Thank you so much! <3