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3. (25 pts) You, the bank, borrow money at 6% compounded monthly and lend at 12% compounded monthly. You lend $400,000 for a 30 year building loan with monthly payments. 3.1. (3 pts) Show the Cash flow diagram for the loan from the banks prospective. 3.2. (5 pts) What is the monthly payment from the borrower? 3.3. (3 pts) What is the total interest paid to the bank over the life of the loan? 3.4. (7 pts) What is the present worth of the loan to the bank on the day the loan is made? 3.5. (4 pts) If the loan (the paper) is sold to another bank for a 10% commission, what is the commission? 3.6. (3 pts) What is the new present worth of the loan for the other bank that purchased the paper? 3. (25 pts) You, the bank, borrow money at 6% compounded monthly and lend at 12% compounded monthly. You lend $400,000 for a 30 year building loan with monthly payments. 3.1. (3 pts) Show the Cash flow diagram for the loan from the banks prospective. 3.2. (5 pts) What is the monthly payment from the borrower? 3.3. (3 pts) What is the total interest paid to the bank over the life of the loan? 3.4. (7 pts) What is the present worth of the loan to the bank on the day the loan is made? 3.5. (4 pts) If the loan (the paper) is sold to another bank for a 10% commission, what is the commission? 3.6. (3 pts) What is the new present worth of the loan for the other bank that purchased the paper

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