j. (1) Construct an amortization schedule for a $1,000, 10% annual rate loan with three equal installments. (2) During Year 2, what is the annual interest expense for the borrower, and what is the annual interest income for the lender? k. Suppose that on January 1 you deposit $100 in an account that pays a nominal (or quoted) interest rate of 11.33463%, with interest added (compounded) daily. How much will you have in your account on October 1, or 9 months later? l. (1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest rate is 10%, compounded semiannually? 0123 Years 100 100100 (2) What is the PV of the same stream? (3) Is the stream an annuity? (4) An important rule is that you should never show a nominal rate on a time line or use it in calculations unless what condition holds? (Hint: Think of annual com-pounding, when INOM 5 EFF% 5 IPER.) What would be wrong with your answers to parts (1) and (2) if you used the nominal rate of 10% rather than the periodic rate, INOM /2 5 10%/2 5 5%? m. Suppose someone offered to sell you a note calling for the payment of $1,000 in 15 months. They offer to sell it to you for $850. You have $850 in a bank time deposit that pays a 6.76649% nominal rate with daily compounding, which is a 7% effective annual interest rate, and you plan to leave the money in the bank unless you buy the note. The note is not riskyyou are sure it will be paid on schedule. Should you buy the note? Check the decision in three ways: (1) by comparing your future value if you buy the note versus leaving your money in the bank; (2) by comparing the PV of the note with your current bank account; and (3) by comparing the EFF% on the note with that of the bank account.