1. Susan is looking to purchase her first home five years from today. The house costs $1,550,000. She will have to make a down payment of 10% of this amount and plans to take a loan from the bank for the difference. Bank charges are approximately 15% of the loan amount. She plans to start saving from today to cover both the down payment and the bank charges.

1. How much will she need to save to cover both the down payment and bank charges?
2. If she currently has $195,000 in her account and will make no further deposits over the next five years, what rate of interest must she earn on this account in order to achieve the savings target calculated in part (a) above?
3. The most attractive investment currently available on the market offers a rate of 6% per annum. Susan receives annual bonuses at the end of every year. Estimated bonus payments for the next 5 years are shown below:

YEAR BONUS

1. 1,500
2. 13,800
3. 17,250
4. 22,25
5. 31,39

If Susan were to deposit her current savings of $195,000 today and deposit her bonus payments over the next five years into this account (paying 6%), will she have enough to cover the down payment and bank charges calculated in part (a) above by the end of the fifth year?