Question
A. Find the present and future value of $1,500 received every month end for 15 years if the interest rate is 9% p.a. compounding monthly
A. Find the present and future value of $1,500 received every month end for 15 years if the interest rate is 9% p.a. compounding monthly (4 marks) B. Find the present value of $800 received at the end of every month for 5 years if the interest rate is 12% p.a. compounding monthly and the first payment is received at the end of 10 years. How would the calculation change if the $800 is received at the start of the month instead (7 marks)? C. Jim is currently 30 years old. He has $15,000 saved up and wishes to deposit this into a savings account which pays him J12 = 6% p.a. He also wishes to deposit $X every month into that account so that when he retires at 55, he will have saved up$300,000. How much should he deposit every month? (9 Marks) [Hint: first find the present value of the withdrawals, then use this answer to calculate the deposit required].
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