Previously you completed your Business degree at UTS. During FBF you developed knowledge and skills which will help you make better and informed personal investment and financing decisions. This got you thinking that you should start making some important decisions relating to your superannuation account so that you can maximize the amount of money you have in retirement. For example, making sure you have all of your money within one superannuation fund, comparing the return earned by different funds, and you have decided to invest your money in an investment allocation which is consistent with your risk tolerance.

Today is June 30 2021, and on this date you have already accumulated $4,000 in your Sunsuper superannuation account, and you have already accumulated $1,000 in your Australian Super account. Today you are going to transfer the $4,000 in your Sunsuper account to your Australian Super account, so that Australian Super can manage all of your retirement money. You decided to use Australian Super as they had relatively lower fees and better investment returns. You decide to invest your money using Australian Super’s balanced investment strategy which is expected to earn a return equivalent to the Reserve Bank of Australia cash rate (as at June 30 2021) plus a margin of 5.90%. This interest rate is compounded monthly (assume this return is the same every period). The financial year ends on June 30 each year. Your employer will make contributions of $500 per month into your super account at the end of each month beginning on July 31 2021 until 30 June 2068 (inclusive). In addition, you will make contributions of $100 per month into your super account at the end of each month beginning on September 30 2050 until June 30 2068 (inclusive).

Given such contributions, your job is to determine the amount of money you will have in your superannuation account on June 30 2068. Please report your answer and show all workings in the appropriate cells allocated to Q5. Your working should be equivalent to the workings you would show in an exam. You may lose marks if you do not show your working out. If you are using Excel functions please specify the Excel function used and the inputs to your formula. An example of showing your workings is detailed below:

You do not need all of the space provided to show your answer. Please report your final answer next to the cell marked “Retirement money”. You will be penalised if you use an amortisation schedule to solve this question.