Question 6 (12 points) Raj intends to borrow $1,000,000 from the Business Investments Bank to build a small shopping mall They intend to pay back the loan with fortnightly payments of $5000, starting a fortnight after they take out the loan The Business Investments Bank charges interest at j 26 5 2 p a 2 marks Illustrate the cashflows associated with this scenario as a fully labelled timeline diagram 2 marks Determine the total number of payments it takes to pay off the loan 3 marks Find the size of the final (partial) payment 2 marks Carry out two different sanity checks on the size of the partial payment 3 marks Determine the outstanding principal immediately after the 200 th payment

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Question: Question 6 (12 points) Raj intends to borrow $1,000,000 from the Business Investments Bank to build a small shopping mall. They intend to pay back

Question 6 (12 points)

Raj intends to borrow $1,000,000 from the Business Investments Bank to build a small shopping mall. They intend to pay back the loan with fortnightly payments of $5000, starting a fortnight after they take out the loan. The Business Investments Bank charges interest at j₂₆ = 5.2% p.a.

[2 marks] Illustrate the cashflows associated with this scenario as a fully labelled timeline diagram.
[2 marks] Determine the total number of payments it takes to pay off the loan.
[3 marks] Find the size of the final (partial) payment.
[2 marks] Carry out two different sanity checks on the size of the partial payment.
[3 marks] Determine the outstanding principal immediately after the 200^th payment.

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