Part Two (23 Marks) Today is 31" July, 2020. Tony is currently 28 years old and he hopes to retire at the age of 65. He is an Economist who works in Melbourne and is seeking a new job. Recently, Tony received two competing job offers from different recruitment companies. Both of the jobs will commence from 11 January 2021. He is thinking which of these offers he should accept and is asking your opinion as a personal financial planner to work out the consequences associated with each option, over the next 5 years. Please see details as below. First offer: The first offer is an economics lecturer role at Deakin University, Geelong. The salary is $110 000 per year before tax, and is estimated to grow at 4% per year. The cost of living in Geelong works out to be $40 000 per year. Second offer: The second offer is as a senior economic analyst at the Reserve Bank of Australia (RBA), located in Sydney. The salary is $190 000 per year before tax, and it is not expected to grow. The cost of living in Sydney works out to be $85 000 per year. Resident tax rates 2019-20 Taxable income Tax on this income 0-518,200 Nil $18.201 - 537,000 19 for wacht over $18.200 $37,001 - 90,000 3.572 plus 32 Se for each 51 over $37,000 590.001-5180,000 $20.797 plus 37c for each $1 over $30,000 S180,001 and over $54,087 plus 45c for each St over $180,000 The above rates do not include the Medicare levy of 2% Source: Australian Taxation Offwww. Dual-income tax rates/> Page 519 a + 1. Calculate Tony's after-tax income each year, for both offers, assuming no deductions and other earnings. Please show your calculations for the 5" year (year 2025) only, for both offers. You should present Tony's after-tax income for every year, using a table. (5 marks) 2. As Tony's financial planner, provide a year-to-year analysis on the financial outcomes of the above job offers, for the next 5 years. How much money would Tony accumulate in 5 years time? Based on the outcome of your analysis, what advice would you give Tony? Please apply the following assumptions: (8 marks) a. Tony saves all his income after deducting all his cost of living. b. Tony works the same job for the next 5 years. c. Tony ears an interest rate of 1.85% on a high interest savings account. Tony does not invest. d. The cost of living does not change. e. Tony gets paid his salary as a lump sum at the start of each year (1" January). Show formulas variables, calculations and a concluding statement in your response. 3. Explain what Tony can consider doing with his money, to increase his wealth. You should research at least two options, and reference appropriately. Reputable websites are acceptable. (6 marks, 250 words MAX) After consulting you, Tony decided that he can afford to contribute money into VAS, an ASX 300 index fund, instead of putting all his money into a high interest account. 4. Assuming Tony would like to accumulate $2 000 000 by the time he retires at 65 years old, and the fund has the capacity to grow at 7% p.a. compounded monthly, how much does Tony need to contribute each month to meet the target? Is this contribution amount realistic for Tony based on your calculations in Part B, question 2? (4 marks) Show formule variables calculations and a concluding statement in your response. Part Two (23 Marks) Today is 31" July, 2020. Tony is currently 28 years old and he hopes to retire at the age of 65. He is an Economist who works in Melbourne and is seeking a new job. Recently, Tony received two competing job offers from different recruitment companies. Both of the jobs will commence from 11 January 2021. He is thinking which of these offers he should accept and is asking your opinion as a personal financial planner to work out the consequences associated with each option, over the next 5 years. Please see details as below. First offer: The first offer is an economics lecturer role at Deakin University, Geelong. The salary is $110 000 per year before tax, and is estimated to grow at 4% per year. The cost of living in Geelong works out to be $40 000 per year. Second offer: The second offer is as a senior economic analyst at the Reserve Bank of Australia (RBA), located in Sydney. The salary is $190 000 per year before tax, and it is not expected to grow. The cost of living in Sydney works out to be $85 000 per year. Resident tax rates 2019-20 Taxable income Tax on this income 0-518,200 Nil $18.201 - 537,000 19 for wacht over $18.200 $37,001 - 90,000 3.572 plus 32 Se for each 51 over $37,000 590.001-5180,000 $20.797 plus 37c for each $1 over $30,000 S180,001 and over $54,087 plus 45c for each St over $180,000 The above rates do not include the Medicare levy of 2% Source: Australian Taxation Offwww. Dual-income tax rates/> Page 519 a + 1. Calculate Tony's after-tax income each year, for both offers, assuming no deductions and other earnings. Please show your calculations for the 5" year (year 2025) only, for both offers. You should present Tony's after-tax income for every year, using a table. (5 marks) 2. As Tony's financial planner, provide a year-to-year analysis on the financial outcomes of the above job offers, for the next 5 years. How much money would Tony accumulate in 5 years time? Based on the outcome of your analysis, what advice would you give Tony? Please apply the following assumptions: (8 marks) a. Tony saves all his income after deducting all his cost of living. b. Tony works the same job for the next 5 years. c. Tony ears an interest rate of 1.85% on a high interest savings account. Tony does not invest. d. The cost of living does not change. e. Tony gets paid his salary as a lump sum at the start of each year (1" January). Show formulas variables, calculations and a concluding statement in your response. 3. Explain what Tony can consider doing with his money, to increase his wealth. You should research at least two options, and reference appropriately. Reputable websites are acceptable. (6 marks, 250 words MAX) After consulting you, Tony decided that he can afford to contribute money into VAS, an ASX 300 index fund, instead of putting all his money into a high interest account. 4. Assuming Tony would like to accumulate $2 000 000 by the time he retires at 65 years old, and the fund has the capacity to grow at 7% p.a. compounded monthly, how much does Tony need to contribute each month to meet the target? Is this contribution amount realistic for Tony based on your calculations in Part B, question 2? (4 marks) Show formule variables calculations and a concluding statement in your response