Question 11

The bank expert advised you to save at least 6% of your income before tax deduction. Accordingly, this will allow you to maintain a similar lifestyle at your retirement age. Your gross income (income before tax) is R800 000 per annum. Likewise, you save the recommended amount into an annuity by way of yearly payments. The saved amount earns 12% interest, compounded annually. Calculate how much you will receive in your retirement annuity when you retire in 40 years' time.

1. R48 000.00

2. R96 000.00

3. R14 857 148.70

4. R36 820 388.18

Question 12

Forty years ago, a young farmer purchased 20 hectares of land for R2 000 per hectare in what is now central business district (CBD). If this land' value appreciates at an annual interest rate of 9%, what is it worth today?

1. R40 000.00

2. R62 818.84

3. R430 294.41

4. R 1 600 000.00