George is 22 years old and has recently completed a Bachelor of Commerce at A University. He has decided to put his learnings into practice and wishes to commence his investment journey. He completed two internships during his University years. As a result of his hard work, he secured a role at PricewaterhouseCoopers earning $80 000 per annum after tax. Assume his income will stay the same over the next 3 years. George's parents advised him to put all his money in property due to their own success in the property market. However, George has decided he would like to invest in BOTH shares and property. George plans to use 25% of his salary after tax as savings for the deposit on his first home. He plans to contribute all the savings to a micro-investing app at the end of every month for the next 3 years. The investment is estimated to earn 8.25% p.a. compounding monthly.
George is 22 years old and has recently completed a Bachelor of Commerce at A University. He has decided to put his learnings into practice and wishes to commence his investment journey. He completed two internships during his University years. As a result of his hard work, he secured a role at PricewaterhouseCoopers earning $80 000 per annum after tax. Assume his income will stay the same over the next 3 years. George's parents advised him to put all his money in property due to their own success in the property market. However, George has decided he would like to invest in BOTH shares and property. George plans to use 25% of his salary after tax as savings for the deposit on his first home. He plans to contribute all the savings to a micro-investing app at the end of every month for the next 3 years. The investment is estimated to earn 8.25% p.a. compounding monthly.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
George has planned ahead and identified his dream house purchase in 3 years’ time. The
current value of the house is $580 000. It is expected that the house will increase in value at
a rate of 4.5% p.a.
4) How much does he need to borrow from the bank at the end of year 3 to buy the
house? (Assume George will borrow 90% from the bank)
Transcribed Image Text:George is 22 years old and has recently completed a Bachelor of Commerce at A University. He has
decided to put his learnings into practice and wishes to commence his investment journey. He
completed two internships during his University years. As a result of his hard work, he secured a role
at PricewaterhouseCoopers earning $80 000 per annum after tax. Assume his income will stay the
same over the next 3 years. George's parents advised him to put all his money in property due to
their own success in the property market. However, George has decided he would like to invest in
BOTH shares and property.
George plans to use 25% of his salary after tax as savings for the deposit on his first home. He plans
to contribute all the savings to a micro-investing app at the end of every month for the next 3 years.
The investment is estimated to earn 8.25% p.a. compounding monthly.
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