WEALTH GROUNDING - FOUNDATIONAL PART
You had lunch with Mabel, a receptionist. Mabel noticed that the term "emergency fund" is frequently mentioned in various articles in the local newspapers. Mabel mentioned that her monthly expenses total about $1,750 per monthly and she has the following:
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Saving Account Balance (Mabel)
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$6,000
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Fixed Deposit Account (Mabel)
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$3,500
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WEALTH PROTECTION - INSURANCE PLANNING
Mabel shared the following information with you:
Her husband, Boon Teck, is 37 years old and they have a daughter Katherine, 12 years old.
Boon Teck wants to provide for the family for the next 10 years until Katherine is 22 years old and has completed her university education. He estimates that the income needed for the family is $70,000 and Katherine's university education is $42,000. He also wants to provide $180,000 as retirement income for Mabel and he estimates that the family will need a miscellaneous amount of $25,000 per annum.
Boon Teck has savings of $35,000 and shares worth $78,000. His assets also include an existing life insurance policy of $50,000.
WEALTH ACCUMULATION - INVESTMENT PLANNING
Boon Teck and Mabel wish to upgrade to a condominium apartment in 2 years' time. They think that if they can obtain a 25 year loan, they can afford to make maximum monthly payments of $2,000 per month (cash and CPF amount). Assume that Boon Teck and Mabel have accumulated the necessary 20% down payment and have also found a bank that is willing to offer them a 4% fixed rate 25-year loan.
Boon Teck purchased an antique chair for $12,000. Today, his chair sold for $33,752. Boon Teck estimated that he had the antique chair for 12 years
WEALTH ACCUMULATION - RETIREMENT PLANNING
Boon Teck is planning for his retirement in 30 years' time. He is deciding whether to invest more in growth investments, conservative investments, or growth and income investments.
Hi, I need help based on the case study.
Based on the case study,
1) What is the maximum loan amount Boon Teck and Mabel can borrow?
2) Calculate the average annual rate of return that Boon Teck received for his investment in the antique chair?