1.An investor wants to purchase a level annuity of 84 per annum payable monthly in arrear for 5 years. Find the purchase price, given that it is calculated on the basis of an interest rate of 6.5 % per annum convertible quarterly.

2.

A multinational creates a new clothing brand to be sold from 1 January 2022 until 31 December 2034. Product development and marketing begin on 1 January 2020. The cost of bringing the products to market comprises of 9 million payable on 1 January 2020 and 12 million payable continuously during 2021. From 1 January 2022, when the textiles are in production, it is assumed that income will be received half-yearly in arrears at a rate of 5 million per annum.

Consider an effective rate of interest of 9% per annum. What is the discounted payback period, starting with the initial cash flow on 1 January 2020?

Your answer should be given in the unit of years, with one significant figure following the decimal point. For example, if you believe the correct answer is 6.5 years then enter 6.5.