Melon Black approached her credit union for a short$-$term loan to finance the final year of college.

She informs the loan officer that she will be able to make monthly payments of $$20000$ and will

repay the loan in ONE $(1)$ year. Short$-$term loans of this nature attract a rate of $8$ percent per year

with monthly compounding.

Required:

A$.$ Determine the maximum amount Melon can borrow from her credit union.

$(4$ marks$)$

B$.$ Prepare the loan amortization schedule for the $12$ MONTHS $(1$ year$)$

$(14$ marks$)$

C$.$ Calculate the effective annual rate on the loan $(2$ marks$)$

$($Total $20$ marks$)$

END OF SECTION