answer correctly and use npv decision rule to answer .

b) Continued with part (aii). Suppose Carter has just had his 35th birthday today and decided to begin his retirement (exactly) 25 years from now, at his age of 60 . To ensure having sufficient funds to meet his goal, Carter plans to start depositing a fixed amount at the end of every month to a retirement savings account (Account B) that pays an interest of 12%, compounded monthly. The first deposit will be made today (on his 35th birthday) and the last on his 58th birthday. (i) Compute the size of the monthly deposit into Account B that will allow Carter to meet the financial goal of his retirement. (8marks) (ii) If Carter is going to make one single (lump-sum) deposit into Account B on his 40th birthday instead, how much will that be for him to achieve the goal? (2marks) Question 3 (15 marks) John has just purchased an apartment at a price of $5,000,000. He made a down-payment of $2,000,000 and financed the remaining with a 30 -year mortgage at APR 12%, compounded monthly. (a) Determine the size of the fixed month-end payments. (5 marks) (b) Calculate the amount John still owes the bank right after the 120th payment was made. (5marks) (c) Calculate the interest payment and the amount of principal paid in the 121st loan repayment. ( 5 marks) Note: Correct answer to calculations-based questions will only be awarded full mark if clearly stated numerical formula (including the left-hand side of the equation) is provided. Correct answer without calculations support will only receive a tiny fraction of mark assigned for the question. Question 1 (15 marks) a) Asset X generates a perpetual stream of cash flows of $100,000 every 3 months. The relevant interest rate is 12%, compounded quarterly. How much would you pay to buy Asset X today if the first payment occurs right away? (5 marks) b) You are considering depositing $1 million into a bank account. After one year, how much more interest on interest will you find in Account (A) that provides an interest of 12% compounded quarterly than Account (B) that provides an interest of 12% compounded semiannually? ( 5 marks) c) The Sharky Finance Ltd. has agreed to provide a loan to Meena on a "four-for-five" monthly basis. That is, for every $4 Meena borrows today, she has to repay a total of $5 a month later. What is the true yearly rate of this loan? ( 5 marks)