Ann is going to graduate from University three years from now. She is confident of earning a monthly salary of $2,500.00 for her first job.

i) If she plans to save $10,000.00 as the down payment for buying a new car after 2 years, how much must she save monthly in a savings account with an interest rate of 2% p.a. compounding monthly?

ii) Assuming she has managed to save $10,000.00 after 2 years, compute the monthly installment for a 7-year hire purchase charging 4% p.a. to acquire a new car worth $70,000.00.

 John has invested in an annuity policy fund which requires him to place an annual deposit of $10,000.00 for the next 20 years. During this period, an interest rate of 10% p.a. will be earned for the first 5 years, followed by an interest rate of 8% p.a. for the next 5 years and 6% p.a. for the remaining years. Compute the accumulated amount at the end of 20 years.

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i To calculate how much Ann must save monthly to have 10000 for a down payment after 2 years with a ... View the full answer