Mrs Jones invests a sum of money for her retirement which is expected to be in 20 years time. The money is invested in a zero coupon bond which provides a return of 5% per annum effective. At retirement, the individual requires sufficient money to purchase an annuity certain of 10.000 per annum for 25 years. The annuity will be paid monthly in arrear and the purchase price will be calculated at a rate of interest of 4% per annum convertible half-yearly. 0 Calculate the sum of money the individual needs to invest at the beginning of the 20-year period. (51 The index of retail prices has a value of 143 at the beginning of the 20- year period and 340 at the end of the 20-year period. (W) Calculate the annual effective real return the individual would obtain from the zero coupon bond. [2] The government introduces a capital gains tax on zero coupon bonds of 25 per cent of the nominal capital gain. (0) Calculate the net annual effective real return to the investor over the 20- year period before the annuity commences. (3] (iv) Explain why the inwestor has achieved a negative real rate of return despite capital gains tax only being a tax on the profits from an investment 12] ITutal 12]