QUESTION 5 (29) a) Suppose you open a savings account today by depositing R100 000. The savings account pays 5% interest compounded quarterly and this rate is assumed to remain in effect for all the future periods. Four years from today you withdraw equal amounts at the end of each year for 5 years. Required; Determine the size of the equal withdrawals that will leave your fixed deposit account with a zero balance. (9) b) You have started a small manufacturing company. You have bought a machine in terms of an agreement whereby you are required to make equal monthly instalments from 1 August 2013 to 1 July 2018. The cash price of the machine is R250 000. Finance charges are linked to the prime overdraft rate. The bank will charge you a premium of 2% above the prime rate which is currently 11%. Required; 1. Determine the equal monthly instalment required to purchase the machine over five years. (6) ii. If the prime rate increases to 13%, before your first instalment payment, what will be the increase in your monthly instalment amount? (5) ii. Suppose the bank offers to give you a three month 'holiday so that you acquire the machine on 1 August 2013 but start your monthly repayments on 1 November 2013. The last payment is still 1 July 2018. What will you monthly instalment be if the prime rate is currently 11%