Question: Suppose James borrows X from David. James will repay the loan in n annual level payments of amount K with payments starting one year after

Suppose James borrows X from David. James will repay the loan in n annual level payments of amount K with payments starting one year after receiving the money. If the annual effective interest rate is 3.5% and if James reduced the principal by 100 on the (n-2)th payment,

a) what is the amount of the level payments K.

b) what is the amount of interest on the (n-12)th payment.

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