Hi I need help with the following two questions on time value of money.

All calculations to be shown.

Question 1

You have just completed a cash outflow forecast for a marketing project that you are championing. The cash flows are presented as follows:

Initial lump sum - 1 000 000

Year 1. - 100 000

Year 2 - 180 000

year 3 - 200 000

year 4- 50 000

The company has access to a flexible money market account providing a rate of 7.45% per annum. Management would like to know how much funds you require as a single lump sum today in order to cover all the cash outflows forecasted above.

Required:

Calculate the present value amount that you require from management. (3)

With reference to any of the five elements of time value of money (N, I, PV, FV& PMT) explain how you could reduce the amount of funds required from management. (2)

Question two

You are interested in purchasing a new motor vehicle valued at R200 000. A bank is able to give you financing at a 13.5% interest rate compounded monthly over 5 years.Required:

Calculate the monthly payments you will have to make in order to pay off the motor vehicle. (4)

Calculate the amount of interest you will have paid the bank over the 5-year period (1)