Mr Lim is meeting his financial planner for his regular financial review. Mr Lim is considering the
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Question:
(a) Compute the bank loan that Mr Lim is able to obtain for his mortgage. (6 marks)
(b) Calculate the maximum amount that Mr Lim is able to offer for the resale flat. (4 marks)
(c) Mr Lim decides not to purchase the resale flat and goes ahead to contribute to the individual retirement account as planned. If he withdraws $5,000 in three years and $15,000 in seven years, assuming no withdrawal penalties, compute how much he will have after eight years. (5 marks)
(d) Mr Lim asks his financial planner to recommend the appropriate monthly contribution if he chooses a regular savings plan to attain his goal of $80,000 in ten years and be disciplined not to make any withdrawals during the interim period. Assume the interest rate is 3% per annum with monthly compounding. (5 marks)
(e) Mr Lim ponders his financial planner's portfolio recommendation. He shares that he is more concerned about capital protection instead of generating returns that beat the market. Appraise and suggest how his financial planner can address Mr Lim's concerns. (5 marks)
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