QUESTION 1 You plan to buy a machine that has a total cost of RM90,400. You will make a down payment of 10% of the price of the machine. The remainder of the machines cost will be financed over a period of 5 years. You will repay the loan by making equal monthly payments. Your quoted annual interest rate is 10% compounded monthly.

a. What will the monthly payment be?

b. If you make a monthly payment at the beginning of every month, how would your answer change in (a)? Briefly explain.