Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are opening a savings account that pays fortnightly interest at a rate of j26 = 2.3% p.a. You wish to save $55,000 for a

You are opening a savings account that pays fortnightly interest at a rate of j26 = 2.3% p.a. You wish to save $55,000 for a mortgage deposit by depositing the same amount into the account at the end of each month, for 2.5 years, starting in a months time. Determine the required size for the fortnightly deposit, R. Apply a sanity check. Construct a sinking fund table for the last five deposits. (Ensure you show how you obtained your starting value for the table.) Describe and apply a sanity check to your table. Suppose that immediately after your 25th deposit, the interest rate rises to j26 = 2.6% p.a. Determine the size of the promises you must make in fortnight 25 and onwards in order to make your target of $55,000 still. With the new interest rate j26 = 2.6% p.a, construct a new sinking fund table for the last five deposits. (Ensure you show how you obtained your starting value for the table.) Describe and apply a sanity check to your table.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Liquidity Risk Management In Banks Economic And Regulatory Issues

Authors: Roberto Ruozi, Pierpaolo Ferrari

1st Edition

3642295800, 978-3642295805

More Books

Students also viewed these Finance questions

Question

=+Does it make you feel cool?

Answered: 1 week ago