Q1 (a) Give the definition of an annuity and give two examples of it. (2 marks) (CLO1:PLO2:C3)(CLO1:PLO2:C3) (b) Chan has to pay RM 500 every month for 20 months to settle a loan at 12% compounded monthly. (i) What is the original value of the loan? (4 marks) (CLO3:PL06:C3)(CLO3:PL07:03) (ii) What is the total interest that he has to pay? (2 marks) (CLO3:PL06:C3)(CLO3:PL07:C3) Q2 A debt of RM 5,000,000 bearing interest at 6% annually is to be discharged by the sinking fund method. If five equal deposits are made into a fund pays 4% compounded annually, (i) find the annual interest payment, (2 marks) (ii) (iii) (CLO3:PLO6:C3)(CLO3:PL07:C3) find the size of the annual deposit into the sinking fund, (4 marks) (CLO3:PL06:03)(CLO3:PL07:03) what is the annual cost of this debt? (2 marks) (CLO3:PL06:C3)(CLO3:PLO7:03) construct the sinking fund schedule. (5 marks) (CLO3:PLO6:C4)(CLO3:PL07:04) (iv)