(a) What is the monthly repayment on a mortgage of £200,000 over 30 years at a 5% rate of interest? (8 marks)
(b) How much should you pay as a lump sum for an annual annuity of £2,000 for 10 years assuming that the annuity starts at the end of year 3 at a 6% rate of interest? (8 marks)
(c) A firm sells 50 units of an item per month. The price of the item is £200, carrying cost of inventory is 10% per annum and it costs £12 to place an order.
(i) Find the economic order quantity, the minimum annual total cost, and the number of orders per year (12 marks)
(ii) - Explain what is meant by Carrying cost and Reorder cost. (2 marks)