(a) The grandparents of a new baby decide that they will try and provide funds for the grandchilds education. They set up an education savings account with their local credit union. They commit to pay $200 into the account at the start of each month for the next 10 years. The account will yield 9 per cent per annum, compounding monthly. How much will be available for the grandchilds education in 10 years? Estimate the amount of excess or shortfall if their grandchild education will cost around $35,000 in 10 years. (4 marks)

(b) Henry needs to save up $100,000 as a deposit to purchase a house. If interest rate is 9% pa. compounding month, estimate the following

(i) How much he needs to deposit to his account at the end of each month to achieve the saving target in 4 years. (3 marks) (ii) Instead if he can manage to deposit 2,000 in his account at the end of each month, will it take more time or less time to save up his house deposit. (1 mark)