(a) James is considering paying £50 into a fund on a monthly basis for ten years starting in one year’s time. The interest earned will be 1 percent per month. Once all of these payments have been made the investment will be transferred immediately to an account that will earn interest at 15 percent per annum until maturity. The fund matures five years after the last payment is made into the fund. Calculate the terminal value of the fund in 15 years’ time to the nearest pound.

(b) Doug wishes to take out a loan for £2000. He has the choice of two loans:
Loan 1: monthly payments for 36 months at an APR of 9.38 percent
Loan 2: monthly payments for 24 months at an APR of 12.68 percent.
(i) Calculate the monthly repayments for loans 1 and 2 to two decimal places.
(ii) Calculate the total amount repaid under each loan and purely on the basis of this information recommend which loan Doug should choose.