1. a) How much will you pay to buy an asset today that will pay you $10,000 every month, with the first payment beginning nine months from now and the last payment exactly 3 years from now? The account pays 1% interest every month. Show supporting calculations. (5 marks)

2. b) Richard has just purchased an apartment at a price of $9 million. He made a down- payment of $4 million and financed the remaining balance with a 20-year mortgage at 6% per annum, compounded monthly.

   1. (i) Determine the size of the fixed month-end payments. (5 marks)

   2. (ii) Assume the interest rate increases to 8.4% per annum, compounded monthly immediately after the 44th payment. If Richard decides to keep the number of remaining payments unchanged, calculate the size of the new monthly payment.(10 marks)