A contractor needs to borrow $$3$ million to upgrade its engineering software licenses, $($re$)$train its staff, and buy new hardware to stay competitive in the market. They receive a seven$-$year loan offer from their bank charging $7\mathrm{.}15\%$ interest per annum, compounded monthly.

Draw the CFD from the contractor's perspective. $.)$

What is the effective interest rate per month? $(0\mathrm{.}15$ pt$.)$

What is the effective annual interest rate? $.)$

If the firm's owners accept the offer and take out the loan, what are the monthly payments? $.)$

Alternatively, if the firm's owners decide to make semi$-$annual payments to the bank, in lieu of monthly, how much are these semi$-$annual payments? $(0\mathrm{.}25)$

Which of the two alternatives has the lower present value $(0\mathrm{.}25pt).$