1. You borrow $2500 from University Lenders, a well-known loan consolidation company. The loan is an unbelievably low 2.0% per month C.M. You have 2 years to pay back the loan.

1. Draw the cash flow diagram for the above (5 points)
2. What is the nominal per year interest rate (10 points)
3. What is the EAIR or APR? (10 points)
4. If you wait until the end of year 2 to pay it off in one lump sum, how much will you pay? Use period interest rate here! (12 points)
5. Now do (d) using effective interest rate (EAIR) (13 points)