Part A:

An athlete was offered the following contract for the next three years:

Year	1	2	3
Cash flows	$5 million	$7 million	$9 million

The athlete would rather have his salary in equal amounts at the END of each of the three years. If the opportunity cost for the athlete is 10%, what yearly amount would he consider EQUIVALENT to the offered contract? (Round your calculation to the nearest dollar)

(6 marks)

Part B:

You bought a piece of agricultural land for $250,000, paid 20% down payment and finance the balance with a loan from Agro Bank. The bank charges you a nominal rate of 12% p.a. with interest calculated on a monthly reducing balance. If the loan repayment is over a 15-year period, what is the total amount of interest dollars you will pay the bank over the life of the loan? (Use 2-decimal places in your calculation)