John is a 30-year-old professional planning for his retirement. He wants to assess the financial impact of different investment scenarios. He's considering investing a lump sum amount and wants to compare two options:
Option A: Invest R50,000 today for 30 years.
Option B: Invest R5,000 per year for 30 years.

Required:
1   John's expected annual interest rate is 6%. Help John evaluate both investment options using present value (PV) and future value (FV) calculations. Calculate and compare the following for each option:
· The Future Value (FV) of the investment at the end of 30 years.
· The Present Value (PV) of the investment (if applicable).

2 You plan to buy a house worth R500,000, and you currently have R100,000 saved for this goal. If you can invest your savings at an annual interest rate of 6%, how long will it take for your savings to grow to the required R500,000 for purchasing the house?

Answer rating: 100% (QA)

SOLUTION 1 Option A Lump sum of R50000 invested for 30 years at 6 annua... View the full answer