1. Meet the Runkles: Harry and Marcia. The Runkles have two boys, Brian and Terry. Brian turns 11 years old in 2020 and starts secondary school in (2021) while Terry is a year younger and starts the year after (2022). The Runkles' neighbours send their children to a private school. It costs $10,000 p.a. for year 7 and increases at a rate of 15 percent p.a. for years 8, 9, 10, 11 and 12. If, instead of sending Brian and Terry to the private school, they send them to the public school for a total cost of $10,000 each across all years, how much will the Runkles have saved by the end of 2027, when Terry would finish up? [Note: this is not a time value question. Simply add up the differential].

2. If they choose the public school option, once the boys finish high school, the Runkles could put the saved money into a trust that distributes the cash when the youngest, Terry, turns 50. The trust invests into a managed fund earning an average of 7 percent p.a., how much would the two boys have to divide between themselves when Terry turns 50?