2. Mr. Tan is currently working as a Branch Manager for a local financial institution. He is currently 40 years old and plans to purchase a house in Johor Bahru that costs RM 1.5 million when he reaches 50 years old. He believes by the time he makes the purchase the price of the property would have increased due to inflation. Mr. Tan's current investment allows him to earn an 8 percent annual return. He plans to invest a fixed amount at the beginning of every year for the next 10 years to fund the cash purchase of the house when he reaches 50 years old.

1. Inflation is expected to be at 6 percent per year for the next 10 years. Determine the single amount he needs to have when he reaches 50 years old.

(3 marks)

2. Estimate the amount he needs to invest at the beginning of the next 10 years to have the cash purchase price of the house when he reaches 50 years old.

(3 marks)

3. If Mr. Tan invests at the end instead of the beginning of every year for the next 10 years, how much must he invest each year?

(3 marks)

4. If Mr. Tan decides to purchase the house right now, how many monthly installments he must pay at the beginning of each month if he obtains a house financing loan from a local financial institution at a 9 percent interest rate. The repayment period will continue until Mr. Tan reaches 65 years old. (3 marks)

(e) Based on the answer in (d), identify how much interest amount he needs to pay for the loan obtained from the financial institution?

(2 marks)

6. You are required to develop a loan amortization schedule to reflect the breakdown of interest and principles if Mr. Tan wants to settle the loan with 5 equal annual payments.

(8 marks)