Question 1 (20 Marks) i. Suppose Johnson would like to support his son to study overseas for the undergraduate program (4-year program) which require $1,200,000. How much does Johnson need to save per quarter in 7 years in order to have this education find? Assume the annual interest rate is 8%. ii. The Maybe Pay Life Insurance Company is trying to sell Johnson an investment policy that will pay him $30,000 per year forever. a) If the required return on this investment is 5.8%, how much will Johnson pay for the policy? b) Suppose a sales associate told Johnson the policy costs $475,000. A t what interest rate would this be a fair deal? iii. Would you suggest Johnson and Catherine to buy an investment- linked insurance policy? Explain why.