B7. (a) A loan is to be repaid over 25 years by means of annual instalments payable in arrear. The amount of the first instalment is 6,000 and each subsequent instalment reduces by 200. The effective rate of interest charged by the lender is 5.5% per annum. (i) Calculate the initial amount of the loan. [3 marks] (ii) Determine the interest and capital components of the 10th instal- ment. [5 marks] (iii) Calculate the total amount of interest payable over the term of the loan. [3 marks] (b) On January 1, 1997, an investment account is worth 100,000. On April 1, 1997, the value has increased to 103,000 and 8,000 is then withdrawn. On January 1, 1999, the account is worth 103,992. Assuming a money weighted method for 1997 and a time weighted method for 1998, the annual effective interest rate was equal to x for both 1997 and 1998. Calculate x. [4 marks]