3. Stephen takes out a 15-year loan at 6% effective, to be repaid with annual repayments...

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3. Stephen takes out a 15-year loan at 6% effective, to be repaid with annual repayments at the end of each year. Each loan repayment is 10% more than the previous year's repayment. Let P be the first payment. (a) Show that for t = 0, 1,...,15, B₁ = 25P (1.1) 15 (1.06) 15-t 27-1.17. (b) Show that negative amortization takes place only in the first 2 years. (c) It is given that the principal portion of the 9th repayment is $1,132.29. Find the interest portion of the 5th repayment. 3. Stephen takes out a 15-year loan at 6% effective, to be repaid with annual repayments at the end of each year. Each loan repayment is 10% more than the previous year's repayment. Let P be the first payment. (a) Show that for t = 0, 1,...,15, B₁ = 25P (1.1) 15 (1.06) 15-t 27-1.17. (b) Show that negative amortization takes place only in the first 2 years. (c) It is given that the principal portion of the 9th repayment is $1,132.29. Find the interest portion of the 5th repayment.

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