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Jay has just graduated from Mulungushi University. He plans to work for five years and then leave for South Africa to pursue his post graduate

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Jay has just graduated from Mulungushi University. He plans to work for five years and then leave for South Africa to pursue his post graduate studies. . He figures that he can save K35, 000 a year for the first three years and K50, 000 a year for the next two years. These savings will start one year from now. In addition, his family gave him a K25, 000 graduation gift. He puts the gift, and the future savings when they start, into an account that pays 10% compounded annually. Required a) Briefly explain the time value of money concept [2 Marks] b) What type of time value money applies to Jay's case [3 Marks] c) What will his financial "stake" be when he leaves for Australia South Africa five years from now? Round off to the nearest value. Show your workings [5 Marks]

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