Students are required to develop an individual report addressing the specific tasks set out in the guideline below.

Task briefing:

Today you decide to start to save money for your retirement.

Now that you are able to save 200 /month, you decided to save those 200 per month in a bank account that offers a 5% interest rate compounded yearly, till the day you retire (that is to say, in 25 years).

Please, answer the following questions:

1.

2.

If you do your deposits at the end of every month (so your first deposit will be in one month from today) in a bank account that offers a 5% interest rate compounded yearly, and you continue doing so till the day you retire (that is to say, in 25 years):

1. a) Draw the timeline (at least the first five periods) with its corresponding numeration of periods and cashflows in their corresponding points. (10 points)

2. b) How much money will you have at the end? (20 points)

If you decide to do your deposits at the beginning of every month (so your first deposit will be done today) in a bank account that offers a 5% interest rate compounded monthly, and you continue doing so till the day you retire (that is to say, in 25 years):

1. a) Draw the timeline (at least the first five periods) with its corresponding numeration of periods and cashflows in their corresponding points. (10 points)

2. b) What is the difference between this case and the previous one? (10 points)

3. c) How much money will you have at the end? (20 points)

If you decide to do your deposits at the end of every month (similarly to question 1, so your first deposit will be in one month from today) in a bank account that offers a 5% interest rate compounded yearly, and the deposits will increase in a 0.04% month after month, and you keep on doing so for the next 25 years:

1. a) Draw the timeline (at least the first five periods) with its corresponding numeration of periods and cashflows in their corresponding points. (10 points)

2. b) How much money will you have at the end? (20 points)