Saul is 40 years and he is married to Rebecca. They have two children, aged 12 and 14. Rebecca is a housewife while Saul is an pilot. . It is estimated that Saul needs to allocate USD 8,000 at the beginning of each month for his family household expenses for the next 25 years. He was worried that in case of any unfortunate incidents happen to him, his familys lifestyle would be badly affected.

Saul is worried about his childrens education fees. He is anticipated to send both children into a private university when both reaching 18 years old. The annual fees for the 4 years studies need to be ready at the beginning of each year. These fees include rental, transportation, and other related expenses that are estimated at USD30,000 per year for each of them.

Upon retirement at the age of 65, Saul wishes to have an annual retirement cash flow of USD75,000 for 25 years at the beginning of each year when he reaches the retirement age. He plans to travel to all states in America with his wife as their children are financially independent.

Saul is evaluating two investment plans, Plan A required him to invest USD90,000 immediately in a fixed income unit trust scheme. Plan B is a regular investment plan requiring him to invest USD5000 every 6 months.

The appropriate discount rate to be used for Jimmys investment would be 9 percent per annum. You are required to assist Saul on the following questions:

1. Identify the total amount of funds needed by his family if he died in a car accident. (2 marks)

2. Identify the total amount needed for both children when they are ready to enroll in a private university. (2 marks)

3. Based on the answer in (b) estimate the amount needed to be saved every month for both childrens education fees until they reach 18 years old. (4 marks)

4. Determine which investment plan is sufficient to accumulate the amount needed for Sauls retirement. Justify your answer. (7 marks)

5. If the retirement annuities needed by Saul grow at 2 percent per year, does the investment plan chosen in (d), sufficient to cover the amount needed for his retirement? Justify your answer. (5 marks)