Omar completed an undergraduate degree at Ontario Tech U in May 2021 with no student loan debt. Ozmar

worked consistently during the undergraduate program, earning $2000 gross per month during January - April

2021 and, during the summer (May - August 2021) $5000 gross per month.

In September 2021, Omar registered in a full-time 2 year Master's program at Ontario Tech U (a full-time 2

year graduate program is continuous - September 1, 2021 through August 31, 2023 thus, 3 terms per year).

Omar received a non-taxable scholarship for each year of the program effective September 1, 2021 and

accepted a TAship for each term (4 months in each term) for the 2021-22 academic year.

Immediately on completion of the MSc in September 2023, Ozmar wants to purchase a new car. On August

31, 2021 Omar invested in a Guaranteed Investment Certificate (GIC) that matures on September 1, 2023

which will be used to help purchase the car. In addition, on September 1, 2021 Omar established a restricted

high interest savings account to accumulate the remaining funds required for this purchase. There are

significant penalties for withdrawls before September 1, 2023 so Ozmar has no intention of making any

withdrawls from this account. Omar uses a separate non-interest bearing bank account for other education

transactions.

Omar's tuition fees and ancillary fees are payable in equal installments on the first day of each term. Ozmar's

scholarship is paid in equal installments at the end of each month over the year, beginning September 30,

2021. The TAship is paid in equal installments at the end of each month, less monthly deductions of $579

which include CPP, El, income tax, union dues and an optional life insurance plan.

Omar lives in a furnished university residence apartment which includes biweekly cleaning, phone, cable and

internet services.

Use this case information to answer the next set of short answers.

Question: 1

Omar's GIC is classified as a TSA, pays interest of 3.5% compounded semi-annually and will have a maturity

value of $16.000 on September 1, 2023. What amount did Ozmar invest in this instrument on September 1,

2021?

Question: 2

Omar expects to need $38000 in September 2023 for the purchase of the car, including all transaction costs.

Assuming the TFSA-GIC is used for this purchase, determine what amount Ozmar will need to deposit to the

restricted savings account at the end of each month in order to have $38000 saved by September 1, 2023.

The restricted savings account pays interest of 2.5%, compounded monthly.

Pcpf7: Adapted for Personal Finance BUS 3430