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Question 5\ A

$2,000

short-term loan was received on January

3^(rd )2024

. This loan is scheduled to be repaid as nine uniform weekly payments. A grace period is granted for 5 weeks during which no repayments are required. The first repayment took place on February

15^(th )

and should continue for 8 more weekly payments.\ a] Create a cash flow diagram of the loan showing both the money received as loan and, in symbols, money paid back to the lender (

(R)/()

week

Question 5 A $2,000 short-term loan was received on January 3rd2024. This loan is scheduled to be repaid as nine uniform weekly payments. A grace period is granted for 5 weeks during which no repayments are required. The first repayment took place on February 15th and should continue for 8 more weekly payments. a] Create a cash flow diagram of the loan showing both the money received as loan and, in symbols, money paid back to the lender (R/week). b] What is the weekly payment if the contract says that the nominal interest rate on this loan is 28% compounded daily? In this part, please assume that the 5 -week grace period is interest-free. That is, the value of time during the grace period is zero. Starting from February 8th midnight, the time value of money follows the contract. c] How much would the weekly payment be had the grace period not been interest free? That is, imagine now that time value of money follows the contract from January 3rd

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