a. You want to buy a house that costs $60,000. You took a $60,000 mortgage loan at an annual rate of 7%, where you will make the payment to the bank in installment at the end of every 6 months. The loan will take 3 years to be paid entirely. How large would each semi-annual installment be? Why there is a "Time Value" associated with money?

b. ACC firm has a cash conversion cycle of 120 days, an average collection period of 25 days, and an average age of inventory of 145 days. Calculate the firm's average payment period in days.