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QUFSTION 5 (To be emailed by 08h00 on Tuesday 26 September 2023) Calculate the following: Mpho has a Sanlam policy that will mature in the near future and would also like to make some investments. Please help Mpho with the following by choosing the closest correct answer. 5.1 Mpho's policy with Sanlam will mature in 10 years time and pay out an amount of R720 000. What is the rate of return if Mpho is contributing R2 700 per month? 5.2 Mpho wants to buy a house in Saldanha. There is a 2-bedroom house for sale for R780 000. Standard Bank will finance it at 821 per year compounded monthly from 1 December. What will the monthly payments be if Mpho has a no deposit and has 20 years to repay the home loan? 5.3 Mpho also approached ABSA for the home loan. ABSA will finance the full R780 000 (10\% deposit required) with a house loan of 8.2% per year, compounded 6 times per year, over a period of 20 years payable at the end of the month. What is the monthly payment? (3) 5.4 Mpho knows that inflation will decrease the purchasing power of a pension lump sum, and therefore, wants to know how long it will take before a R2,4m is halved by inflation. The inflation rate is 6%. 5.5 Which of the following will provide Mpho with the highest return on investment? 12,4% per year, 1% per month; 12.24% per year compounded per quarter; or 12.48% per year compounded monthly? 5.6 How much should Mpho invest monthly in a retirement annuity if R2,4 million will be needed at retirement in 15 years' time? The investment will earn a return of 5,6% per year compounded monthly. How long will the money last if Mpho withdraw R20 000 per month after retirement? (3) CONFIDENTIAL

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