563, 000 loan was originally made at a rate of 2.5% compound quarterly for 1 year. At the end of this period, the loan was extended for 2 years and 6 months, with a new interest rate of 3% compounded continuously, using simple interest for anything less than a year period.   a. find the amount after 3 years and 7 months. b. create the cash flow diagram for the borrowers perspective with the type of interest labelled respectively.  c. briefly explain your solution.

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Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.