1. You have taken out a loan of $300 000 at an interest rate of 3%...

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Finance

1. You have taken out a loan of $300 000 at an interest rateof 3% per annum compounded quarterly. You plan to repay the loan in240 reducing-principal payments made at the end of each quarter andstarting at the end of the first quarter.
(a) How much is the principal reduced by after eachpayment?
(b) Write down an expression for the loan balance beforerepayment Am at the end of period m. This means that A1 should givethe initial loan balance.
(c) Write down an expression for the interest Im owed at theend of period m. Do not round values.

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Effective annual interest rate 13441 30339Quarterly interest rate 0758PeriodLoan at the beginning A1Installment paidevery quarterInterestPrincipalLoan balanceat the See Answer

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1. You have taken out a loan of $300 000 at an interest rateof 3% per annum compounded quarterly. You plan to repay the loan in240 reducing-principal payments made at the end of each quarter andstarting at the end of the first quarter.(a) How much is the principal reduced by after eachpayment?(b) Write down an expression for the loan balance beforerepayment Am at the end of period m. This means that A1 should givethe initial loan balance.(c) Write down an expression for the interest Im owed at theend of period m. Do not round values.