Question: Question 2 TVM H 115 math) Timo started working as a craftsperson which will pay him $4,000 per month. He anticipates a 0.2% monthly increase

Question 2 TVM H 115 math) Timo started working as a craftsperson which will pay him $4,000 per month. He anticipates a 0.2% monthly increase in the paycheck. Alluof his savings are invested in ETF, which has an expected return of 8% pa. Assume monthly compounding for the following questions. Required : (1) What is the effective annual rate (EAR) of the ETF? (5 marks) (2) His short-term goal is to have enough savings to pay $6,500 for a family vacation in 2 years. He set aside $5,000 in ETF today for this goal and did not make any additional contributions. How much will he have after 2 years in ETF? Would he be able to achieve his goal? [5 marks) (3) His parents decided to cover all the expenses for the family vacation, so Timo is going to enjoy a free vacation. Now, Timo instead wants to save money for the down payment of $50,000 for the downtown apartment in 5 years. He already has $5,000 in ETF, and he is also going to save 15% of his paycheck at the end of each month into ETF for the next 5 years. How much will he have after 5 years? Would he be able to achieve his goal? (5 marks)

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