Question 1.a (15 marks)

Ingrid has requested your advice in relation to her objective of purchasing a second apartment (as an investment) within two years.

In your response address two key issues set out below.

Issue 1: the financial capacity to undertake the necessary savings plan for two years for the deposit

The interest on the deposit savings account is 1%. The existing cash at bank and share portfolio ARE NOT available for the deposit.

Based upon a preliminary review, the bank has told Ingrid that the savings plan for two years is only viable if some of the overtime payments are included but did not specify the amounts involved. The overtime payments are not certain and not as predictable as salary payments. Ingrid is nervous about a savings plan that relies upon the overtime payments. The bank also stated that using salary payments only, the plan is viable if extended to three years.

Ingrid has requested the following:

- the savings plan amount per month (4 marks)

- the shortfall with reference to her existing budget per month (2 marks)

- your opinion on the key issues to consider in deciding between a two year plan or a three year plan and your recommendation (3 marks)/>