Problem # 4 (sheet # 4). This problem is designed to demonstrate the impact of changes in interest rates (part A) and the amount of the loan (part B) on quarterly payments. In both parts of the problem, assume that the payments occur quarterly over a five year period. Assume that the balance (future value) of the loan is 0 after 5 years. In other words, you pay off the entire loan in 5 years. (6) B D A 1 Problem 4 # Payments per Year Quarterly Payments Total # of Payments Annual Rate Rate per Quarter 3.25% 3.50% 3.75% 4.00% 4.25% 3 Loan Amount (PV) Years 4 200,000 5 200,000 6. 200,000 7 200,000 8 200,000 9 10 11 Problem 40 12 13 Loan Amount (PV) Years 14 150,000 15 175,000 200,000 17 225,000 18 250,000 19 20 21 22 # Payments per Year Quarterly Payments Total of Payments Annual Rate Rate per Quarter 4.15% 4.15% 4.15% 4.15% 4.15%