You have just opened a savings account which pays monthly interest at a rate of j12 = 5.5% p.a. You wish to accumulate $15,000 by depositing the same amount into the account at the end of each month, for 24 months, starting in a months time.

Question 23 You have just opened a savings account which pays monthly interest at a rate of j12 = 5.5% p.a. You wish to accumulate $15,000 by depositing the same amount into the account at the end of each month, for 24 months, starting in a month's time. a) Determine the required size for the monthly deposit, R. Apply a sanity check. [2+1=3 marks] Due to economic conditions, the interest rate is renewed every three months (quarterly). Table 2 below reports the interest rate over the course of two years. Table 2 Q1 5.5% Year 1 Q2 Q3 2.8% 4.5% Q4 4.0% Q1 4.2% Year 2 Q2 Q3 3.8% 2.5% Q4 7.5% b) Assuming that you maintain the same monthly deposit of R determined in part a), determine the size of your sinking balance after two years. Will you meet your target of $15,000? Describe and apply a sanity check for your answer. [5+2=7 marks] Construct a sinking fund table showing 24 deposits with the variable interest rate. Describe and apply a sanity check to your table. c)