Supperanu questn (1 Viewer)

[jannny]

An employee joins a superannuation fund on their eighteenth birthday by investing 3000 in the fund. This investment is repeated every six months until retirement on sixtieth birthday(Last payment is made six months before retirement).

If the interest rate of 12.25% per annum is compounded six monthly, calculate the amount they will receive on retirement. (to nearest dollar)

Ok I am having trouble working out number of repayments(always on supperanu quetsions). is amount of n repayments [59-18] * 2 ] +1 = 83 ?

 

[darkliight]

Well, they make two payments when they're 18, two more when they're 19, etc, up until 59, so you're good there. But they don't make a payment when they're 60 (note the last part of the first paragraph). So just drop your +1 and I think you're good.

 

[jannny]

wait im confused

isnt it when he reaches 59 he has made (59-18 x 2) repayments.
He retires at 60 meaning before he reaches 60 he has to make another payment. (6 months before being 60) meaning +1 more.

Help please

 

[watatank]

they make two payments every year...at the start of the year and halfway though.

so in the 6 months before he turns 60 (i.e. when he is 59) which is after his last payment he has already made the two yearly payments he has been making since he was 18.

 

[dlesmond]

Solution attached, not sure if it's right though.

n should be 84, not 83.

 

[darkliight]

wait im confused

isnt it when he reaches 59 he has made (59-18 x 2) repayments.
He retires at 60 meaning before he reaches 60 he has to make another payment. (6 months before being 60) meaning +1 more.

Help please

Yep, sorry I didn't check the count up to 60, just noted that the +1 shouldn't be there.

Just to be sure, here is my count (rearranging it a bit so it's easier to count):

He makes two payments per year every year from the age of 18, so:

20, 21, ..., 29 is 10 years. Likewise, 30 - 39, 40 - 49 and 50 - 59 are each 10 years. We include 59 because he makes a payment when he turns 59, and another 6 months before he turns 60 (per the last part of your first paragraph).

So far, 40 years right? Now, we haven't counted 18 and 19 yet, so 42 years worth of payments all up, at 2 payments per year is 84 payments (or (59-17)*2).

Look ok?

 

[yoakim]

The end solution does seem quite far-fetched