Question: You have the option of paying off a standard loan (e.g. mortgage) with either equal sized quarterly or equal sized annual payments. Payments can only be made as per the quarterly or annual schedules. All other terms of the loan remain the same under both payment schedules. Which of the following statements is true and why?

a) The quarterly payment would be exactly one-fourth of the annual payment

b) The quarterly payment would be less than one-fourth of the annual payment

c) The quarterly payment would be more than one-fourth of the annual payment

d) None of the above