Question: A savings plan offers 7.8% interest per year, compounded weekly. You plan to save (deposit) monthly in this plan for 25 years, starting from the

A savings plan offers 7.8% interest per year, compounded weekly. You plan to save (deposit) monthly in this plan for 25 years, starting from the end of next month (January 2021), so that you have a total savings of RM500,000 at the end of the 25-year term.

(a) What is the effective monthly interest rate you earn from the savings plan? [Note: 52 weeks per year, and 12 months per year]

(b) How much must you save (deposit) each month?

(c) If you think that you would be able to increase your savings (deposits) at the rate of 0.1% per month over the 25 year period, how much must your first saving (deposit) be at the end of next month, in order to achieve the same level of total savings as above at the end of the term?

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