QUESTION 1

A . Ivan has one daughter and one son. It is estimated that an average wedding cost R25 000. Assuming 7.5% annual inflation, what would it cost Ivan to pay for his daughters wedding in 16 years?

B. Melvyn saved R300 every month since February 1998 at 8% p.a. compounded monthly. At the end of every November he withdraws R3 000 to buy gifts for his wife and children. How much is in that account now, the end of September 2018? Assume that Melvyns 1st withdrawal was in 1999. Assume also that during November, there will only be a withdrawal and no deposit.

C. Jeffrey recently bought Harley Davidson Freewheeler for R383 000. Assume that the lifespan of this trike is 20 years with a salvage value of R20 000. Assume that the prices of these trikes escalate annually by 12%. Determine the replacement value of this bike after 8 years. Assume that the declining balance depreciation method is applicable.