In this assignment, you continue to provide financial advising to Matthew and Martha (the M&M family). M&S financial situation changes since Matthew had a promotion, few changes in their expense. However, M&M have resolved, as originally planned, to save a total of $800 per month:

1. M&M are saving $500 each month for a down payment on a new care they will purchase within a year.
2. M&S are also saving $300 each month for their childrens post-secondary education which begins 12 years from now.

M&M noticed that their local bank offers guaranteed investment certificates (GICs) with a number of different maturities. M&M need to determine which GICs will best suit their savings goal. Each GIC requires a minimum investment of $300.00

Here are the different GICs maturity options were the bank stated that the interest rate for each GIC is compounded annually:

Q1 Advise M&S on which maturity to select when investing their savings in a GIC for a down payment on a car. What are the advantages or disadvantages of the relatively short-term maturities versus the longer-term maturities?

Maturity	Annual Interest Rate (%)
1 Year	1.25%
2 Years	1.5%
5 Years	2%
10 Years	3%

Assume that M&M decided to save $800 per month in a GIC account. The funds will not be available to M&M for the term of the GIC they choose.

Based on the current M&M status, they have about $300 in cash and $1700 in their chequing account.

To give you the current perspective of the current personal cash flow statement and personal Balance Sheet, please use the following:

M&MCash-FlowStatement Income: Monthly \begin{tabular}{|l|lc|} \hline Matthew's Salary(net: after taxes and benefits) & $ & 3,850.00 \\ \hline Martha's Salary (net: after taxes and benefits) & $ & 950.00 \\ \hline Other Income & $ & - \\ \hline TOTAL: Monthy Income Amount & $ & 4,800.00 \\ \hline \end{tabular} Expenses: Monthly Amount \begin{tabular}{|l|rr|} \hline Mortgage & $ & 1,200.00 \\ \hline Car Expenses (gas, insurance, maintenance) & $ & 400.00 \\ \hline Cable TV & $ & 60.00 \\ \hline Utilities (gas, electric, cable) & $ & 80.00 \\ \hline Phone & $ & 70.00 \\ \hline Food \& Groceries & $ & 500.00 \\ \hline Clothes & $ & 280.00 \\ \hline School Expenses & $ & 100.00 \\ \hline Entertainment (dining out, golf, weekend trips) & $ & 700.00 \\ \hline Credit Card Payment (minimum) & $ & 20.00 \\ \hline TOTAL: Monthly Expenses & $ & 3,410.00 \\ \hline & & \\ \hline Net Cash Flow Statement & $ & 1,390.00 \end{tabular}