QUESTION 2 (25 Marks) (a) (b) James pays an amount, X to receive payments of RM100 at the beginning of each month for 10 years. Once he received these payments, they are immediately invested in Fund Y, earning isl2) = 0.12. The monthly interest payments from Fund Y are reinvested in Fund Z, earning ;(42) = 0.06. Over the 10-year period, James' effective annual yield rate is 8%. Determine X. (8 marks) A 5-year annuity has monthly payments. The first payment at the end of the first month is RM4,000 and then the payments decreases by RM50 each month. Find the present value of the annuity using a nominal interest rate of 8% convertible quarterly. (10 marks) A property investor buys an apartment for RM450,000 and makes a down payment of RM50,000. The balance he finances with a 25-year mortgage with monthly payments at a nominal interest rate of 4.35% p.a. compounded monthly. Calculate the amount of interest paid throughout the loan. (7 marks) (c)