A sum of £15,000 is to be invested in a Long-Term Savings Account and growth is projected at 3.25% gross per annum over the next 10 years, subject to tax at the standard rate of 20%. a) Draw the curve to illustrate growth of this investment. b) If no money is withdrawn, calculate how much is in the account after 10 years, after tax. c) There is an opportunity to transfer the investment into an Instant Cash Individual Savings Account, which attracts 1.95% per annum, tax free. Again, if no money is withdrawn, calculate how much theinvestment would be worth after 10 years. d) Comment on your findings above and decide which of the accounts is a better investment and likely togive a better rate of return, bearing in mind that the interest rate of the Individual Savings Account willfluctuate with the bank lending rate.
A sum of £15,000 is to be invested in a Long-Term Savings Account and growth is projected at 3.25%
gross per annum over the next 10 years, subject to tax at the standard rate of 20%.
a) Draw the curve to illustrate growth of this investment.
b) If no money is withdrawn, calculate how much is in the account after 10 years, after tax.
c) There is an opportunity to transfer the investment into an Instant Cash Individual Savings Account,
which attracts 1.95% per annum, tax free. Again, if no money is withdrawn, calculate how much theinvestment would be worth after 10 years.
d) Comment on your findings above and decide which of the accounts is a better investment and likely togive a better
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