You have taken out a loan of $32,000 to buy a new Saturn. The loan will be paid off in monthly instalments starting in one month over the next 4 years (48 payments). The interest rate on the loan is 8.25% per year. The bank doesnt tell you, but it is compounded quarterly.

a) The monthly loan payments are (3 marks)

b) The interest charged in the first month is (1.5 mark)

c) The first payment reduces the principal outstanding by (1.5 mark)