Question

8. Paul and Tabitha are saving to go on a trip to Greece. They would like to go two years from now. They plan to save $300 per month in a savings bond that earns 5.1%, compounded monthly. They have a mutual fund that has been earning 85%, compounded semi-annually, to which they will contribute a lump sum, in order to save the remaining amount needed. a) Calculate the value of their savings bond after two years. If they estimate that they need $9000 to cover airfare, hotels, food, and transportation costs, how much will they still require to finance their trip? (2 marks) b) What amount will they need to contribute to their mutual fund so that they can cover the remaining trip in two years? (1 mark)

Answer 1

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l00 A-,20o o) Thu valui 0 0 all coits $9000 stil amo 0285+ Cove th cot remainin? tu ie A. $1。28.57 to op So we

1: 8.5 ίσο n Comoumded Semi an Cie For eyert menthe ears. $1028 5+ to Cove irem aining Yi