Reference no: EM132884987

Mr and Mrs Drake have hired your team of financial planners to consult on their intention to buy their next home. In 5 years time, they intend buy a 3 bedroom house in CBD to live in. They intend to spend $1,590,000 to buy their house.

Given the deposit Mr and Mrs Drake must pay in the future, they also task you with finding a good investment to help them save.

Find and present in your business report, the best (highest interest rate) term deposit available in the market.

Mr and Mrs Drake have the following conditions and needs for the term deposit you present to them:

1. The term deposit is to be from a Credit Union, Building Society or Mutual Bank.
2. The term of the deposit matures when they purchase the house in the future.
3. They require interest to be calculated and paid semi-annually
4. Mr and Mrs Drake have $80,000 to invest today

Problem a) Given what Mr. and Mrs. Drake have to invest today, apply financial math and calculate the future value of investing in your recommended term deposit today, for when Mr and Mrs Monash need to buy their house. (show your formula, substitution and working)

Problem b) Do Mr. and Mrs. have enough now, to pay for their deposit in the future? If yes, by what percentage are they over their deposit.

If not, with the term deposit investment, will they have saved enough to pay for their deposit in the future? If not, by what percentage are they under their deposit.