Rizal, aged 27, graduated five years ago with a degree in business and is currently employed as a middle-level manager for a fairly successful grocery chain. His current annual salary of RM70,000 has increased at an average rate of 5 percent per year and is projected to increase at least at that rate for the foreseeable future. The firm has had a voluntary retirement savings program in place, whereby employees are allowed to contribute up to 11% of their gross annual salary (up to a maximum of RM12,000 per year) and the company matches every ringgit that the employee contributes. Unfortunately, like many other young people who start out in their first "real" job, Rizal has not yet taken advantage of the retirement savings program. He opted instead to buy a fancy car, rent an expensive apartment, and consume most of his income. However, with wedding plans on the horizon, Rizal has finally come to the realization that he had better start putting away some money for the future. His fiance, Alin, of course, had a lot to do with giving him this reality check. Alin reminded Rizal that besides retirement, there were various other large expenses that would be forthcoming and that it would be wise for him to design a comprehensive savings plan, keeping in mind the various cost estimates and timelines involved. Rizal figures that the two largest expenses down the road would be those related to the wedding and down payment on a house. He estimates that the wedding, which will take place in twelve months, should cost about RM15,000 in today's value. Furthermore, he plans to move into a RM250,000 house (in today's terms) after 5 years, and would need 20% for a down payment. Rizal is aware that his cost estimates are in current terms and would need to be adjusted for 4 percent annual inflation rate. Moreover, he knows that an automatic payroll deduction is probably the best way to go since he is not a very disciplined investor. Rizal is really not sure how much money he should put away each month, given the inflation effects, the differences in timelines, and the salary increases that would be forthcoming. All this number crunching seems overwhelming and the objectives seem insurmountable. If only he had started planning and saving five years ago, his financial situation would have been so much better. 5. If Rizal starts saving immediately for the 20% down payment on his house, which he plans to pay the developer five years from today, how much additional money will he need to save in his bank account each month? 6. If Rizal wants to have RM1 million (in terms of TODAY's value) when he retires at age 65, how much should he save in equal monthly deposits from the end of next month in the voluntary savings plan? Ignore the cost of the wedding and the down payment of the house. As mentioned, this voluntary savings plan earns a rate of 7 % per year, and assumes monthly compounding. Rizal, aged 27, graduated five years ago with a degree in business and is currently employed as a middle-level manager for a fairly successful grocery chain. His current annual salary of RM70,000 has increased at an average rate of 5 percent per year and is projected to increase at least at that rate for the foreseeable future. The firm has had a voluntary retirement savings program in place, whereby employees are allowed to contribute up to 11% of their gross annual salary (up to a maximum of RM12,000 per year) and the company matches every ringgit that the employee contributes. Unfortunately, like many other young people who start out in their first "real" job, Rizal has not yet taken advantage of the retirement savings program. He opted instead to buy a fancy car, rent an expensive apartment, and consume most of his income. However, with wedding plans on the horizon, Rizal has finally come to the realization that he had better start putting away some money for the future. His fiance, Alin, of course, had a lot to do with giving him this reality check. Alin reminded Rizal that besides retirement, there were various other large expenses that would be forthcoming and that it would be wise for him to design a comprehensive savings plan, keeping in mind the various cost estimates and timelines involved. Rizal figures that the two largest expenses down the road would be those related to the wedding and down payment on a house. He estimates that the wedding, which will take place in twelve months, should cost about RM15,000 in today's value. Furthermore, he plans to move into a RM250,000 house (in today's terms) after 5 years, and would need 20% for a down payment. Rizal is aware that his cost estimates are in current terms and would need to be adjusted for 4 percent annual inflation rate. Moreover, he knows that an automatic payroll deduction is probably the best way to go since he is not a very disciplined investor. Rizal is really not sure how much money he should put away each month, given the inflation effects, the differences in timelines, and the salary increases that would be forthcoming. All this number crunching seems overwhelming and the objectives seem insurmountable. If only he had started planning and saving five years ago, his financial situation would have been so much better. 5. If Rizal starts saving immediately for the 20% down payment on his house, which he plans to pay the developer five years from today, how much additional money will he need to save in his bank account each month? 6. If Rizal wants to have RM1 million (in terms of TODAY's value) when he retires at age 65, how much should he save in equal monthly deposits from the end of next month in the voluntary savings plan? Ignore the cost of the wedding and the down payment of the house. As mentioned, this voluntary savings plan earns a rate of 7 % per year, and assumes monthly compounding