Josh has just retired and has received a lump sum pay-out of $1,500,000. He invests part of this pay-out on an investment property which earns 3 percent per annum and provides a perpetual income to him of $40,000 per year (assuming end-of-year withdrawals). He puts the rest of the pay out in another investment in the form of an annuity which earns 4 percent per annum. He wants to make equal annual withdrawals over the next 10 years from this investment annuity, to fund some overseas trips and a few other extravagances, leaving a balance of zero,

Required (i) Calculate how much Josh has invested in the investment property. (ii) Show how much extra Josh can expect to spend each year (assuming end-of-year withdrawals), over and above the $40,000 from the property investment, for the next 10 years from the investment annuity. Note: ignore tax in your calculations.