Answer the following compounding/discounting questions assuming year-end cash flows:

a. The Chicago Hope Hospital purchased a MRI machine for 2 million dollars, using a 5-year loan at 10% interest. What will be the annual payment for the machine ?

b. The price of the MRI machine (2 million) is rising at a fixed rate of 5% each year. How much would it cost to replace the MRI machine five years from now ?