As an investment manager of an insurance fund, you have been advised the following scenario by your actuary:

the fund currently has $ 150 million invested across different assets;

insurance premium income inflow is expected to be $50 million a year for the next five years approaching zero thereafter. Assume these inflows are received and invested at the end of each year;

compensation for liabilities is expected to drain out some $150 million a year beginning the end of year 6 out to the end of year 10.

Investments earn 8% pa.

Find out:

A- How much money will be left in the fund at the end of the 10^thyear?

B- If you were required to pay a perpetuity out of the money left in the fund at the end of the 10^thyear, how much could you afford to pay?