2 010 2 U B2ulkh2m H ills

Karen contributes to a superannuation fund. She contributes $250 at the start of every
quarter. The investment pays 8% pa interest, compounding quarterly. She continues making
contributions for 30 years.

(i) How much does she contribute altogether? 1

(ii) What is the value of her initial $250 investment at the end of 30 years? 1

(iii) Find the total value of her superannuation. 3

201.5 2U Fo rt Street

A person invests $800 at the beginning of each year in a superannuation fund.

Compound interest is paid at I 0% per annum on the investment. The first $800 is to be
invested at the beginning of2016 and the last is to be invested at the beginning of
2045. Calculate to the nearest dollar:

1. The amount to which the 2016 investment will have grown by the beginning of
2046 2

11. The amount to which the total investment will have grown by the beginning of
2046 2
201.5 2U Sy dney G r2tl".m2r

Michael is about to retire and has arranged for his superannuation lump sum of $P to
be deposited into an account which earns 33 per annum interest, with interest paid
monthly on the balance. He intends to withdraw $6400 at the end of each month to
live off.

Suppose that $A n is the balance immediately after the nth withdrawal.

(i) Use the fact that A1 = P(1 ·0025) - 6400 to determine an expression for A2 . [!]
(ii) Hence show that A 3 = P(l·0025) 3 - 6400(1 ·0025) 2 - 6400(1·0025) - 6400. [!]
(iii) Find the value of P to the nearest integer if the balance will be zero after t he [!]
180th withdrawal.
201.5 2U J2me s R use

When Robby is 3 months old, his parents decide to make a regular deposit of
$500 every 3 months, starting with first one when Robby is 3 months old in an
account that earns interest of 8%p.a., the interest being paid every 3 months.

(i) Show that the day after Robby's 1st birthday (after payment is made), the value of 2
the account is given by $ 2060.80.

(ii) How much money will be in the account the day when Robby turns 15 after the 2
payment is made?

(iii) No more payments are made into the account after Robby turns 15 and no 1
withdrawals are made.
Find the amount in the account on Robby's 16th birthday.

(iv) Robby decides that he will withdraw a regular amount of money from this 2
account each birthday, starting with his 16th birthday. He cannot decide whether
he should withdraw $4000 or $5000 each birthday.
By considering the result of part (iii), comment on what will happen in each case.