A loan of amount $3,000 is to be repaid with bi-monthly payments of $269,36 for 2 years.

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Question:

A loan of amount $3,000 is to be repaid with bi-monthly payments of $269,36 for 2 years.
(a) Find the nominal rate of interest and the outstanding loan balance immediately after the sixth payment is made.
(b) Explain why the answer in (a) is larger than one-half of the initial loan balance.