An wishes to buy a house, and needs to borrow

350,000 from the ABC Bank which will charge interest at a rate of j26 = 6% p.a. Initially

she intends to repay this loan with fortnightly payments of 1500, with the fifirst payment

occurring one month after the loan was taken out. However, after making 11 payments

she loses her job and misses the 12th, 13th, 14th payments. By the time of the 15th the

payments are resumed and from the 16th payment she plans to drop this back to 1000

per fortnight.

(a) How big does the 15th payment have to be to return you to your original repayment

schedule?

(b) Determine how long it takes to repay the loan (Identify Outstanding Principal OP first).

(c) Find the size of the partial payment. Describe and perform a sanity check on your

answer.

(d) Construct an amortization table showing the last three payments (i.e two full pay

ments and a partial payment), and describe and perform a sanity check on the fifinal

outstanding principal.