PLEASE ANSWER THE HIGHLIGHTED QUESTION (1C, 2B AND 3B). THANK YOU Question 1: [18 marks] You are considering investing in a scholarship fund for your daughter. The fund operates in the following way. . Starting in one month's time you would make regular monthly deposits of $50 for a period of eight years into a scholarship fund. Immediately after your final deposit the fund would pay $10,000 to your daughter to help her with expenses when she commences university study. a) Illustrate this scenario as a fully labelled time line diagram. [2 marks] To be able to compare this fund with other possible investments, you need to know the effective interest rate, jn, that this fund returns b) Derive and present the equation of equivalence that is appropriate for this scenario. Do NOT seek to simplify the expression, but rather leave $10,000 as the value of the left hand side (LHS). (Hint: This is a "Price is Right" problem but with a PV.] (4 marks) c) Using an estimate of 1-1%, determine the value of the right hand side (RHS) of the equation of equivalence. Enter this value to 2 decimal places as an answer to "Assignment 1 - Milestones" question 1c. You can have as many attempts of this as you wish without penalty, but this question will close at 4.00pm on Friday 7 August. There will be no marks available for this question part after then [2 marks d) Present you next three estimates of i and the corresponding value of the right hand side of the equation of equivalence. Ensure that for each of these three steps you explain why you increased or decreased the value of i. Question 2 [18 marks] A retiree deposits $500,000 in a bank account which pay interest ju2 = 5,4% p.a. Starting in a month's time, they intend to withdraw $4000 to cover their living expenses until run out of money. [NB It is likely that their final withdrawal will be a partial withdrawal a) illustrate this scenario as a fully labelled timeline diagram. [2 marks] b) Determine how many full sized withdrawals they can mark. Enter this value as an answer to "Assignment 1 - Milestones" question 2b. You can have as many attempts of this as you wish without penalty, but this question will close at 4:00pm on Friday 7 August. There will be no marks available for this question part after then [2 marks] Question 3: [18 marks] You wish to save $2000 to go on a holiday when you finish university in 2.5 year's time. You plan to do this by making regular deposits of the same size into a savings account that pays interest js = 4.68% p.a., starting in one week's time. a) illustrate this scenario as a fully labelled time line diagram. [2 marks] b) Determine the deposit size required. Enter this value to 2 decimal places as an answer to Assignment 1 - Milestones" question 3b. You can have as many attempts of this as you wish without penalty, but this question will close at 4:00pm on Friday 7 August. There will be no marks available for this question part after then [2 marks] PLEASE ANSWER THE HIGHLIGHTED QUESTION (1C, 2B AND 3B). THANK YOU Question 1: [18 marks] You are considering investing in a scholarship fund for your daughter. The fund operates in the following way. . Starting in one month's time you would make regular monthly deposits of $50 for a period of eight years into a scholarship fund. Immediately after your final deposit the fund would pay $10,000 to your daughter to help her with expenses when she commences university study. a) Illustrate this scenario as a fully labelled time line diagram. [2 marks] To be able to compare this fund with other possible investments, you need to know the effective interest rate, jn, that this fund returns b) Derive and present the equation of equivalence that is appropriate for this scenario. Do NOT seek to simplify the expression, but rather leave $10,000 as the value of the left hand side (LHS). (Hint: This is a "Price is Right" problem but with a PV.] (4 marks) c) Using an estimate of 1-1%, determine the value of the right hand side (RHS) of the equation of equivalence. Enter this value to 2 decimal places as an answer to "Assignment 1 - Milestones" question 1c. You can have as many attempts of this as you wish without penalty, but this question will close at 4.00pm on Friday 7 August. There will be no marks available for this question part after then [2 marks d) Present you next three estimates of i and the corresponding value of the right hand side of the equation of equivalence. Ensure that for each of these three steps you explain why you increased or decreased the value of i. Question 2 [18 marks] A retiree deposits $500,000 in a bank account which pay interest ju2 = 5,4% p.a. Starting in a month's time, they intend to withdraw $4000 to cover their living expenses until run out of money. [NB It is likely that their final withdrawal will be a partial withdrawal a) illustrate this scenario as a fully labelled timeline diagram. [2 marks] b) Determine how many full sized withdrawals they can mark. Enter this value as an answer to "Assignment 1 - Milestones" question 2b. You can have as many attempts of this as you wish without penalty, but this question will close at 4:00pm on Friday 7 August. There will be no marks available for this question part after then [2 marks] Question 3: [18 marks] You wish to save $2000 to go on a holiday when you finish university in 2.5 year's time. You plan to do this by making regular deposits of the same size into a savings account that pays interest js = 4.68% p.a., starting in one week's time. a) illustrate this scenario as a fully labelled time line diagram. [2 marks] b) Determine the deposit size required. Enter this value to 2 decimal places as an answer to Assignment 1 - Milestones" question 3b. You can have as many attempts of this as you wish without penalty, but this question will close at 4:00pm on Friday 7 August. There will be no marks available for this question part after then [2 marks]
