Direction
Please read the questions carefully. Please draw the cash flow diagrams and explain the steps that you are going to approach to solve the problems then solve the problem. Show the details in solving the problems. Missing Cash Flow Diagram is deductible points equal to 20% of the total points for each question
Q1) A young man has just been employed by a government agency. He has good job security and expects consistent 5% annual salary increases. His starting annual salary is $30,000. He plans to save 10% of his monthly salary at a bank, which pays 5.4% interest, compounded monthly. At the end of each year, he will put accumulated savings into a money market fund that is expected to pay 8% interest at the end of each year. Calculate the amount of money he expects to have after ten years.