Case Study 3 (50 marks) After retiring from AA business, Clive gives $370,000 as first instalment of inheritance to his 18- year-old grandson named Gary. Task 1 To ensure that Gary does not squander his inheritance, Clive advise him to put his money into saving account. In total, Garry has $370,000 to deposit. Bank of Melbourne offers in a high interest savings account of 1.50% compounded monthly, while Westpac Bank offers 1.50% percent but will only compound annually. How much will your investment be worth in 15 years at each bank? (10 marks) Task 2 Diamond Wealth Co. is trying to sell Gary an investment policy that will pay him and his future family your heirs $9,000 per year forever. If the required return on this investment is 2.25%, how much will Gary pay for the policy? Can Gary afford this investment using inheritance that his grandfather gives him? Explain. Task 3 Given Inheritance from his grandparent, Gary is abandoning his dream to become a medical doctor but instead training to be an e-sport athlete. As a part of his training, he is looking to purchase Alienware M17 R4 Gaming laptop with a cash price of $6,300. Alternatively, Gary can buy interest free and no deposit with the full price of $7,100 due in two years. However, as he has already spent his money on a holiday, he does not have the cash available right now. He could use the store's low interest rate card and buy now. The low interest rate is 10.5% per annum and requires a one-off payment of the full amount owed in 24 months' time. Which is the better option - buying the laptop today for $6,300 and paying interest on the store card, or paying nothing today and instead pay the retailer $7,100 in two years? (15 marks) Task 4 Gary would like to save for the deposit for an apartment. In addition to the $10,000 cash gift he has other savings of $15,000. As he is living at home, he is confident he can save $20,000 each year while there. He plans to move out of home in early 2024. He would like to open a savings account today (being 1 January 2021) that pays a fixed interest rate of 2.89% per annum. He would immediately deposit his $25,000 cash and then at the end of each year deposit $20,000 (i.e., on 31 December 2021, 31 December 2022 and 31 December 2023). Marcello plans to close the savings account on 31 December 2024. How much would Marcello expect to have saved by 31 December 2024? (15 marks)