Availability of state and federal disaster loans was the featured article in The Enterpris...

Availability of state and federal disaster loans was the featured article in The Enterprise Ledger (AL) on March 14, 2007. Alabama Deputy Treasurer Anthony Leigh said the state program allows the state treasurer to place state funds in Alabama banks at 2 percent below the market interest rate. The bank then agrees to lend the funds to individuals or businesses for 2 percent below the normal charge, to help Alabama victims of disaster to secure emergency short term loans. Laura Harden qualifies for an emergency loan. She will need $3,500 for 5 months and the local bank has an inter-est rate of percent. (a) What would have been the maturity value of a non-emergency loan? (b) What will be the maturity value of the emergency loan? Round to the nearest cent.