1.Treat the loan as running for 24 fortnightly evenlyspaced) periods each year over 30 years.

2.Deposits to the savings account are made at the end of each fortnightly period.They can be either $800 or $1600.

3.The initial balance of the savings account is zero.

4.The savings account earns compound interest at an effective annual rate equivalent to the mortgage rate (given above).

5.The interest offset facility is modelled as follows: the interest earnings at the end of each fortnight are credited towards the loanand so the savings account accumulates without interest.

6.The loan starts with an outstanding balance of $1000000. Interest is charged at the end of each fortnight,when a loan repayment is also made.The repayment is at a level to extinguish the loan after thirty years at the given mortgage rate(ignoring any interest offset facility).

7.If the interest offset facility is operating ,then ,at the end of each fortnight, the interest from the savings account is credited towards the loan.