Question 1. You have a saving of $35000 now and you wish to investment in an investment portfolio that pays the rate of return is 10.5% per annum. Required:

a.In term of time value of money, what is the amount of $35,000 represent? What is the rate of return 10.5% called?

b.If you maintain the portfolio investment in 15 years, how much money will you have from this portfolio after 15 years, if the rate 10.5 % is compounded annually (to the nearest dollar)?

c.How much will you have in 15years if the rate is compounded semi-annually, quarterly, monthly, weekly and daily?

Question 2. Long time ago Lisa had put an amount of $50,000 into an investment in the securities market. Now she has$150,000 in her investment account.

Required:

a.If the average rate of return Lisa earned for the investment is 7.6%, how many years she has maintained the investment so far?

b.If the Lisa would have wished to obtain the target of $150,000 within 10 years only, how much money should she put into the initial investment given the same rate of return is applied?

c.Assume that Lisa would like to put the amount of $150,000 into another investment and aims for a new saving target of $500,000 to buy a new house. Given the interest rate of new investment is 8.5%, how long will Lisa get her $500,000?d.Lisa has another option for her plan to buy a new house: Using $150,000 as a deposit and get a mortgage from a bank to buy the new house. ANZ bank offered Lisa the lending interest rate of 4.85% per year, compounding semi-annually. Commonwealth Bank offered her the lending rate of 4.83% per year, compounding monthly. By calculating EAR, identify which bank should Lisa choose?

Question 3.You plan to invest your saving of $15000 in the next 12years with two phases: in the first 7years you invest it in an account that pay an interest of 6.5% compounding quarterly. In the last 5 years you invest the total amount accumulated in the first 7 year in another asset that pays you interest of 8% compounding monthly.

Required:a.How much money would you have at the end of 12years?

b.If you wish to have $75000 at the end of 12years, how much should you invest now?