1. Your aunt May is thinking about retiring from her job in couple of years and devoting all her time to taking care of street animals. For that purpose, she would like to establish an animal shelter. May plans to buy a large land for the shelter. She needs to pay 150,000TL to buy the land right now. She will start the construction of animal shelter a year from today. At the start of the construction, she needs to pay 300,000 TL in full to build the shelter, play grounds, fence around the property and the small veterinary clinic. It will take about a year to complete the construction of the facilities.

The animal shelter can start its operations in 2 years from today. The operating expenses of the facility will be as follows. The food is going to cost 80,000TL per year forever. There will be a full-time veterinarian on the promises to deal with the health problems of these animals. The salary of the veterinarian will be 60,000TL. The heating expense, water and electricity bills will be 7,500TL per year forever. She will hire 4 full time employees. The annual salary for one of these employees will be 30,000 TL per year forever. All of these operating expenses will be paid at the beginning of every year.

May can save 125,000TL per year right now and she thinks that she can continue to save this amount after retirement which is in exactly two years from today. At that time, the animal shelter will be fully functional. She is going to deposit her saving for this year into their bank account in couple of days. She also plans to spend her savings for this year and the following 4 years on this project. As a result, a total of 5 years of her savings will be spent on this project. She already saved 100,000TL for this project. She wants to use this amount and her five year of savings for buying the land and construction.

Today, May is going to start a fund raising for this project as well. She thinks she will be able to raise 50,000TL in the 1^st year, 80,000TL in the 2^nd year and 120,000TL in the 3^rd year. From thereon, funds raised will stay at 150,000TL forever. Funds from these fundraising activities will be available at the end of every year.

Any extra money she has after buying the land and paying for the construction will be saved to pay for the operating costs of the shelter in the following years. She deposits her savings and money raised through fund raising into a bank account that pays an annual interest rate of 7% per year compounded daily forever (Assume that there are 365 days in a year). Your aunt also talked to her banker, also an animal lover. She agreed to loan her any extra money she will need to buy the land and start construction at an annual interest rate of 8% compounded monthly with a grace period of 1 year which starts after the last borrowing.

1. Check to see if your aunt will have enough money pay for the construction a year from today from her savings and fund-raising activities till the end of year

1. If not, determine the amount of money she needs to borrow from the bank for the construction at the end of year 1.

2. James learned from her bank that no payment is required from her until the end of the grace period. However, the interest on the borrowed funds will be charged starting from the day of borrowing till the end of 1 year grace period. Once the 1 year grace period is over, your aunt is expected to pay the loan balance (actual amounts borrowed plus the accrued interest on the borrowed amounts) back in the following 2 years with equal semiannual installments. The first payment will be on the day the grace period ended and the last payment will be in exactly 2 years from that day. Determine the semiannual payments

your aunt needs to make in every 6 month period and prepare a loan amortization table for your aunt. Please note that your aunt is going to come up with this money from other sources and will not use the money raised from fundraising activities and her savings for this purpose.

3. If your aunt wants his animal shelter to be around forever and have enough resources to cover its expenses forever, determine the amount of money she needs to have in the account at the time the shelter starts operating.
4. Determine if your aunt will have this amount in the account through her fund-raising activities and from their remaining savings. If not, determine the extra amount she needs to have at the time the shelter starts operating.