This is a long case study that brings together the analysis techniques covered in both Chapters 13 and 14. Students should work through it carefully to ensure that they understand all aspects of the calculations and discussions, before attempting the end of chapter questions.

Having qualified as a physiotherapist, Louise Donovan now has a job in the physiotherapy department of a large city hospital. She is very careful with money and has managed to pay off ail her student loans, as well as saving almost £5000 towards a deposit to buy a house. Louise's boyfriend, Ben, is not so good with money. Ben is an insurance broker and he earns more than Louise, but she quite often has to help him out with cash towards the end of the month. Louise is in love with Ben and would like them to get married as soon as they've saved up enough to get the house.

A couple of months ago Louise's grandma died. No-one had realised until she died and the will was read that the old lady had also been a very efficient saver. She leaves Louise, her favourite granddaughter, £30 000. Louise is delighted by this unexpected piece of good news; now she has enough money for a deposit and she can go ahead and arrange the mortgage as soon as she and Ben have found the house they want. Ben, however, has other ideas. In his opinion, Louise should invest the money and he thinks he's found her a really good investment opportunity. Ben isn't too worried about buying the house; he's not sure that he's ready to settle down yet, and, besides, the way Louise has been saving, they'll have enough in another couple of years in any case. He occasionally feels guilty that he hasn't contributed any savings himself, but part of his salary is in commission, and he's planning to work really hard this year to find new clients.