A loan of £35,000 was taken out on 1 January 2010. The loan is repayable by an annuity payable quarterly in arrears for twenty years. The amount of the quarterly repayment increases by £120 after every four years. The repayments were calculated on the basis of a nominal rate of interest of 8% per annum convertible quarterly. (i) Calculate the initial amount of the quarterly repayment. (ii) Calculate the amount of capital which was repaid in the first instalment on 1st April 2010. (iii) Calculate the amount of loan outstanding after the quarterly repayment due on 1st January 2023 has been made.
