Mikolas Proude is seeking to establish an investment portfolio with 2 investments. These are a zero coupon bond with the government authority, Sandgrid, requiring an initial investment of $5 000 and a high interest deposit with the Stateside Bank requiring an initial investment of $15 000. The zero coupon bond accumulates interest at 9% p.a. compounded monthly for a 10-year term and has an upfront fee of $50 subtracted from the initial investment. The high interest deposit with the Stateside Bank earns interest at 5% p.a. compounded half-yearly for a 5-year term and has a fee payable on maturity of $200 subtracted from the investment value. It is expected that Mikolas will be able to reinvest the initial investment in Stateside Bank at the end of 5 years into a further high interest deposit for another 5-year term at 4% p.a. compounded quarterly. This further deposit also has a fee payable on maturity of $200 subtracted from the investment value.

Required:

(1) Calculate the approximate net value of Mikolas portfolio at the end of 5 years.

(2) Calculate the approximate net value of Mikolas portfolio at the end of 10 years.

(3) What is the approximate compound annual rate of return on the portfolio?