Rudi needs an amount of R400 000 (today’s value) to buy a new car in 7 years’ time. The price of the car will increase by 7% per annum and any investment that he makes will grow at an interest rate of 9.5% per annum. He wants to invest by way of annual instalments to buy the car in 7 years’ time. The instalments must increase by 6.5% per annum. 

The instalment that he must make at the beginning of Year one, is (rounded to the nearest Rand):