Zaman Zoom Ltd have 500 employees with an average salary of $3,000 per month. Their average age are 30. The company is planning to start an Endowment scheme as the company pension scheme for all the companys employees. The period of investment is expected to be for 30 years before the first batch of employees will go for retirment. The company is going to set aside a salary deduction system to deduct 50% of the required installment for the endowment scheme.

The installment payment will be invested in the endowment scheme with a target to achieve a capital endowment sufficient to generate income to take care of the pension payment at 50% of the last drawn salaries expected to averaged at RM10,000 in 40 years time. A fund management with a good reputation had assured that the endowment fund will generate an average return at 6% per annum.

a. Estimate the monthly installment required by the company to the endowment fund. b. How much will each employee will have to contribute monthly to the pension fund. c. If each employee has an option to join the fund or to create their own investment fund,

what would be your choice and why ?