You have just passed ACST1001 and started a summer internship at Harrison Bank, with Peter as your supervisor. As your first task, Peter has given you some client accounts and asked you to verify some of the details.

The first file is for a client named Mary, who has a mortgage with the bank. You go through the file and note the following information for Marys mortgage

• Initial loan: $540,000
• Term of loan: 25 years
• Repayment frequency: End of each fortnight
• Interest rate on loan: i12=6.6%

Using this information, determine the following:

What is the periodicity needed given the above information?

a.

Monthly, since the 6.6% is a nominal annual rate compounding monthly

b.

Daily, since there are exactly 365 days in a year (ignoring leap years)

c.

Fortnightly, since the repayments are fortnightly

d.

Yearly, since the term of the loan is measured in years

The interest rate for Mary's loan is i12=6.6%. Calculate the effective monthly rate. Give your answer as a percentage to 4 decimal places, and do NOT include a percentage sign.

Calculate the effective fortnightly rate. Give your answer as a percentage to 4 decimal places, and do NOT include a percentage sign

Calculate the size of each of Marys repayments using the information given above. Give your answer to the nearest cent, and do NOT include a dollar sign.