A) Jack has borrowed $1,000,000 from MQ Bank for 10 years at an interest rate of j2=3.70%. He will make 10 annual repayments. According to the loan agreement, Jack's repayments will be $94,000 for the first two years followed by payments of with the amount of X per year for the remaining eight years. This loan needs to be fully repaid by the end of 10 years.

i) Assume that all annual repayments will be paid at the end of each year (the first payment will be at the end of the first year), what is the value of Jacks' annual payment amount X (rounded to four decimal places)?

Select one:

a. 129660.9987

b. 120757.9125

c. 120573.4950

d. 129945.0469

ii) Assume that all annual repayments will be paid at the beginning of each year (the first payment will be at the start of the first year), what is the value of Jacks' annual payment amount X (rounded to four decimal places)?

Select one:

a. 124254.5437

b. 119607.0575

c. 124032.5186

d. 119781.6282

B) Mike wants to donate $1,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of j4=4.93% p.a. effective and the first scholarship will be first awarded 2.5 years after the date of the donation.

i) What is the amount of the annual scholarship (rounded to two decimal places)?

Select one:

a. 54048.96

b. 56763.24

c. 50218.95

d. 52990.31

ii) Assume that The fund earnings rate rate has changed from j4=4.93% to j4=4.68% one year before the first scholarship payment. How much does Mike need to add to the fund at that time (one year before the first scholarship payment) to ensure that scholarship amount will be unchanged (rounded to two decimal places)?

Select one:

a. 58554.09

b. 61494.62

c. 57417.42

d. 54404.83