Hong$-$bin borrows $$27,550,000\mathrm{.}00$ which he will repay by making interest only payments over $18$ years. The interest rate on the loan is i$(12)=8\mathrm{.}750\%.$

He is also required to set up a sinking fund that will be used to pay the principal at maturity, and that the bank will sieze in case of default. The interest rate on the sinking fund is i$(2)=2\mathrm{.}750\%.$

Payments on both the loan and the sinking fund will be made bi$-$weekly. The bank will reinvest the interest payments at an interest rate of i$(2)=9\mathrm{.}625\%.$

Hong$-$bin defaults on the loan after $3$ years $($just after making both his loan payment and sinking fund deposit$).$

a$)$ The sinking fund payment is $Answer $1$ Question $5.$

b$)$ The amount in the sinking fund at the time of default is $Answer $2$ Question $5$

c$)$ The amount in the reinvestment account at the time of default is $Answer $3$ Question $5$

d$)$ The ROI for the bank at the time of default is Answer $4$ Question $5\%$