You have decided to open a savings account which pays monthly interest at a rate of j12 = 6% p.a. You wish to save $15,000 for a mortgage deposit by depositing the same amount into the account at the end of each month, for 2 years, starting in a months time. a) Determine the required size for the monthly deposit, R. Apply a sanity check. b) Construct a sinking fund table for the last three deposits. (Ensure that you show how you obtained your starting value for the table.) Describe and apply a sanity check to your table.

c) Suppose that immediately after your 20th deposit, the interest rate falls to j12 = 3% p.a. Determine the size of the deposits you must make in months 21 to 24 in order to still make your target of $25,000.

d) With the new interest rate j12 = 3% p.a, construct a new sinking fund table for the last five deposits from month 20th to 24th. (Ensure that you show how you obtained your starting value for the table.) Describe and apply a sanity check to your table.