Tiffany is considering taking a loan for the required amount for her renovation. Her local bank charges 7.8% per year compounded quarterly and requires quarterly repayments. The bank offered Tiffany a one-year interest-only option with her three-year loan. This means that for the first year, every quarter Tiffany would pay only interest on the amount borrowed. Loan repayments consisting of both interest and principal would then commence in the second year continues for the third year.

(a) Use an EXCEL spreadsheet that shows the end-of-the quarter balance in Tiffany's loan account over the next three years. In addition, use your amortisation schedule to calculate the total interest and the total amount paid over the life of the loan. Include a screenshot of your spreadsheet with your assignment submission.

(b) A wealthy family friend nicknamed Lecce had offered to help Tiffany and has made an alternative offer for her to obtain the $10,000 loan. Lecce has proposed the following loan terms over a 12-month period. He claims this is a 'cheaper and simple' with everything paid off at the end of the renovation. Lecce will give her the $10,000 at the start of the month and Tiffany will start pay $900 at the each of each month for until the end of the loan period. He claims he is entitled to $800 in interest, which will be paid to him under his proposed conditions. Tiffany would like to know the interest rate Lecce is charging her and they would also like to verify the total amount of interest ($800) he claims he is entitled to. To answer this question, follow all EXCEL instructions below - including the instructions given in the two diagrams. Also show your calculation for the total interest Tiffany paid under this arrangement.

(c) Tiffany is seeking your advice in making this financial decision. Summarise the finding