Today is 1 July 2018. MQU bank is offering a 25 year \$1,000,000 loan product from July 2018 to June 2043 to its customers.

1. This loan product requires customers to make monthly repayment. Payment will be paid at the beginning of each month with an amount of \$6,500. Use the Goal Seek to find the implied annual nominal rate of interest payable monthly (i.e., j12) charged by MQU bank. Assume that there is an annual fee of 350 paid on 1 July of each year and the first payment is on today.
2.  For this loan product, each customer can have an option to defer the repayment by 6 months. Specifically, customers can borrow \$1,000,000 on 1 July 2018 and their payment will be paid at the beginning of each month with an amount of \$6,500 from January 2019 to December 2043. Assume that there is an annual fee of 350 paid on 1 July of each year from 2018 to 2043 and the first payment is on today. For this option, MQU will charge an additional fee with amount of \$35,000 on 1 January 2019. Use the Goal Seek to find the implied annual nominal rate of interest payable monthly (i.e., j12) charged by MQU bank.
3. Assume that another bank, QMU bank, is also offering a 25 year \$1,000,000 loan product to its customers. Customers have the half yearly, quarterly payment and monthly options. Using these options, customers are required to make payment at the start of each period (i.e., at start of each year, half-year and quarter). In this product, customers can borrow \$1,000,000 on 1 July 2018 and their payment will be paid at the beginning of each half year, each quarter or each month from January 2019 to December 2043 . Assume that there is no annual fee and the QMU bank charges an annual nominal rate of interest j1 = 6.25% p.a. for these payment options. Find the customer’s half yearly, quarterly and monthly payment amount. Use a bar or column chart to plot the quarterly, half yearly and yearly payment amount.

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