2. You have just graduated from high school and received an award for BDT 100,000. You're planning to go for masters abroad. You'll join the 4 (four) year Bachelor program in January 2022. You believe you'll complete the Bachelor program in 4 years and start the Master program immediately. The master in your subject is a 2 (two) years program. The current monthly tuition fees, accommodation and other costs of the masters program is around BDT 150,000 per month to be paid at the beginning of the month. During the time of admission, you'll also need to pay the admission fee, flight fair and shopping which will be a lumpsum of BDT 300,000. The annual inflation is 5%, and it is assumed to remain constant during your Bachelor study period. The rate you can earn on any savings now till you complete Bachelors is 12%. It is expected to increase and offer you 15% on any savings after your Bachelor (i.e.: during Masters study). Required: a) How much must you have during the start of the masters program to attain study abroad? (7) b) How much must you save each month till you complete bachelor to meet your goal to study abroad? Assume you'll deposit the savings in your account at the end of each month. (8) 3. After graduation you're planning to buy a car. The car you want to buy is an Audi A6, that is priced BDT 6 million. You inherited BDT 1 million from your family which you will use for the down payment and loan processing fee, the rest of the amount you will borrow. You contacted the City Bank Limited and the Brac Bank Limited for loan. The city bank offered you 8% rate of interest charged yearly, The offered rate of Brac bank is 8.5% paid monthly. The loan tenure would be 4 years. Required: a) Which bank is feasible for you to borrow at the cheapest cost. Use the appropriate analysis to conclude your decision. (2) b) What would be the fixed payment of the bank you have chosen in a) for borrowing to buy the car? (3) c) Prepare a schedule to show breakdown of principal and interest payments for your fixed payment loan from the chosen bank in a). (5) d) Why the principal payments are increasing every year as the loan tends to mature? (2) 2. You have just graduated from high school and received an award for BDT 100,000. You're planning to go for masters abroad. You'll join the 4 (four) year Bachelor program in January 2022. You believe you'll complete the Bachelor program in 4 years and start the Master program immediately. The master in your subject is a 2 (two) years program. The current monthly tuition fees, accommodation and other costs of the masters program is around BDT 150,000 per month to be paid at the beginning of the month. During the time of admission, you'll also need to pay the admission fee, flight fair and shopping which will be a lumpsum of BDT 300,000. The annual inflation is 5%, and it is assumed to remain constant during your Bachelor study period. The rate you can earn on any savings now till you complete Bachelors is 12%. It is expected to increase and offer you 15% on any savings after your Bachelor (i.e.: during Masters study). Required: a) How much must you have during the start of the masters program to attain study abroad? (7) b) How much must you save each month till you complete bachelor to meet your goal to study abroad? Assume you'll deposit the savings in your account at the end of each month. (8) 3. After graduation you're planning to buy a car. The car you want to buy is an Audi A6, that is priced BDT 6 million. You inherited BDT 1 million from your family which you will use for the down payment and loan processing fee, the rest of the amount you will borrow. You contacted the City Bank Limited and the Brac Bank Limited for loan. The city bank offered you 8% rate of interest charged yearly, The offered rate of Brac bank is 8.5% paid monthly. The loan tenure would be 4 years. Required: a) Which bank is feasible for you to borrow at the cheapest cost. Use the appropriate analysis to conclude your decision. (2) b) What would be the fixed payment of the bank you have chosen in a) for borrowing to buy the car? (3) c) Prepare a schedule to show breakdown of principal and interest payments for your fixed payment loan from the chosen bank in a). (5) d) Why the principal payments are increasing every year as the loan tends to mature? (2)
