Adam is loaning $5000 to Bert for a period of 2 years. SupposeBert will repay the loan with a $5000 balloon payment at the end ofthe 2 years and will pay monthly interest payments each month whichwill end the month before the $5000 balloon payment. e. If interestis 6% effective interest, how much will Bert’s interest payments beto Adam each month? f. If Adam takes the payments he receives eachmonth from Bert and reinvests them at 3% annual interest compoundedmonthly, how much will he have in his savings account at the timethat Bert pays the balloon payment? g. What is Adam’s rate ofreturn on his initial investment of $5000? That is find the yieldrate as an effective interest rate.
