Question 3

Mrs. Walcott plans to purchase a home in the next seven years. She joins a Sou-Sou that would pay her $30 000 at the end of each year. She also runs a boutique which is projected to give the following profits for the next seven years:

Years	Amounts
1	$13 500
2	$14 625
3	$12 750
4	$16 500
5	$18 750
6	$18 000
7	$22 500

Mrs. Walcott would like to invest the amounts into CIBC at an interest rate of 6.5% compounded. Compute how much money Mrs. Walcott will have at the end of the seven years to purchase home.

Students are required to:

1. Calculate using excel; and (10 marks)

2. Calculate using the appropriate financial equations. (15 marks)