Question $1$

Mr$.$ Brown borrows K$9000$ to purchase a duplex. He is required to repay the loan in equal monthly installments over a five$-$year period, interest being $9\mathrm{.}5\%$ p$.$a$.$ compounded monthly at a reducing balance loan model.

$($a$)$ What are his monthly repayments?

$($b$)$ What termination payment is required to terminate the loan after $2$ years?

Question $2$

At the end of the next six $4-$month periods, we will receive K$400,$ K$600,$ K$500,$ K$800,$ K$700$ and K$500$ respectively. If inflation is running at a constant $10\%$ p$.$a$.$ compounded yearly:

$($a$)$ What is the periodic inflation rate?

$($b$)$ What is the net present value of this gift?