Question: - Co = 50,000 - n = 3 years - adjustable interest rate - adjustment period: 1 year - Semi-annual constant payments over each adjustment

- Co = 50,000

- n = 3 years

- adjustable interest rate

- adjustment period: 1 year

- Semi-annual constant payments over each adjustment period.

- nominal interest rate for the first period: 4.5%

- Interest rate for the remaining periods: the index rate plus 0.25 percentage points

- index rates for each of the periods: IR2 = 0.055; IR3 = 0.045

Calculate the unpaid balance of the loan at the end of the second year and the amount the borrower has to pay in order to cancel the loan if there is an early cancellation fee: 2% of the outstanding balance at time of cancellation.

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