Reference no: EM133016478

Question - The government of India wishes to promote the use of Hydro System to supplement electricity generation. To do this they implement a policy under which they will match whatever a citizen can raise as a deposit on a Hydro System (to a maximum government grant of $4,000).

You are an Indian citizen. You decide to take advantage of this policy and start saving to purchase a Solar Array for your house. Starting in a week's time you will deposit $30 every week for one year into savings account, which pays interest j52 = 8.5% p.a.

a. Illustrate your savings regime using a fully labelled time lime diagram.

b. Determine the amount you will have accumulated after 52 weeks. Describe and apply a sanity check on your answer.

c. Construct a sinking fund table showing the last four deposits.

You use the amount determined in part (c) plus the government grant as a deposit on a new array, which has a price of $3800. You borrow the rest from a bank with interest charged at j52 = 10% p.a. You plan to repay the loan with weekly payments of $50, commencing in a week's time.

d. Illustrate this scenario using a fully labelled time line diagram.

e. Determine how long it takes to repay the loan, and also determine the size of the final (partial) payment. Describe and carry out a sanity check on the partial payment.