Stage 2 General Mathematics Assessment Type 2: Mathematical Investigation Topic 4: Financial Models – Preparing for retirement Part 1: Superannuation Select a superannuation fund site to investigate...

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Stage 2 General Mathematics Assessment Type 2: Mathematical Investigation Topic 4: Financial Models – Preparing for retirement Part 1: Superannuation Select a superannuation fund site to investigate and select an investment option into which Katarina’s money will be invested. Select a rate of return that you will use for your original calculations, and provide brief reasons for your selection. Decide on the frequency of payments being made into the account by the employer. Include evidence of the investment information in your appendix. Sites such as the one found at the links below provide a range of superannuation fund rate of return information: https://www.ratecity.com.au/superannuation/companies http://www.supersa.sa.gov.au/investments/our-performance/income-stream https://www.hesta.com.au/members/investments/super-investment-options https://www.ratecity.com.au/superannuation/australiansuper Include evidence of the rate information in your appendix. · Select investment option from one of the websites listed above. · State the rate of return (from the website) · State the frequency of payments (weekly, fortnightly, monthly, or quarterly) · Explain why you selected the investment option and the frequency of payments that you stated previously · Include screenshot of this in your Appendix (last section of the report, after the references section) Part 2: Account balance at retirement (how much Katarina will have at age 65 years) Calculate the account balance at retirement that Katarina would have in her superannuation fund if only the compulsory employer contributions were being made into the account until her retirement. Assume that the compulsory employer contributions are 9.5% of salary. · Show all working out, and explain the calculator program you use, to calculate the total amount of money that you/Katarina has at age 65. · State your final answer in a sentence to show your understanding of what you have calculated. Part 3: Living off the income in retirement Calculate how much money Katarina will have to live off if she places all of the account balance in her superannuation fund into an annuity to provide a regular income. Sites such as the one found at the link below provide a range of rate of return information: http://www.supersa.sa.gov.au/investments/yearly-rates-of-return/ Include evidence of the rate information in your appendix. · find a yearly rate of return from the website provided. · Screenshot the rate information and include this in your appendix (with a figure legend) · Show all working out used to calculate how much money you/she will have to live off based on the yearly rate of return you have selected. Part 4: Effect of inflation Katarina currently takes home (calculate fortnightly income based on salary from career card) pay a fortnight after tax. Calculate how much Katarina would need to receive from her annuity at 65 years of age to be receiving an equivalent amount, taking into account inflation over this period. Include evidence of the CPI rate chosen in your appendix. · Include this table in your appendix. Use this to calculate how much you will be taxed per fortnight (with your own figure legend, and include the website in your reference list) Resident tax rates 2022-23 Taxable Income Tax on this income (%) 0 - $18,200 0 $18,201 - $45,000 19 $45,001 - $120,000 32.5 $120,001 - $180,000 37 $180,0001 and above 45 The information in the table above is based off of the information from: https://www.ato.gov.au/rates/individual-income-tax-rates/ · Calculate your fortnightly income (with reference to the career you received at the beginning of the task – there should also be information about this in your appendix) · Calculate how much the cost of living will be (due to inflation) when you/she is 65. · Include a screenshot of your selected CPI (consumer price index) in your appendix. The following website may support you in calculating/selecting this: https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release Part 5: Further investigations Undertake further investigations for Katarina to provide her with advice on what might affect the final account balance in her superannuation fund. Your investigations may include: · Making personal contributions to her superannuation fund · Investing in different investment options over her career, e.g. a growth option in the beginning and a conservative option near retirement · The effect of wage increases/decreases · A change of retirement age · The effect of taking time off work e.g. to travel or for a change of career · A change to the CPI rate and if it will affect the amount that Katarina would need to receive in retirement. These calculations should look at both how much her account balance will be at retirement age as well as how much she will be able to draw as a regular income over the 20 years throughout retirement. · Select one of these factors to change · Explain why you have selected to change this factor, and how you predict it will affect the final account balance in the superannuation fund · Show all working out for calculations to show how much the final account balance will be after changing your selected factor · Show all working out for calculations to show how much will be able to be withdrawn as a regular income over the 20 years throughout retirement after changing your selected factor · State the difference between this final account balance and the final balance from your original calculations. · Repeat these steps for at least one more of the factors stated above
Answered 2 days AfterSep 23, 2022

Answer To: Stage 2 General Mathematics Assessment Type 2: Mathematical Investigation Topic 4: Financial Models...

Sandeep answered on Sep 25 2022
26 Votes
CASH FLOW STATEMENT
Part 1:
Select investment option from one of the websites listed above.:
There are multiple Investment Long term Investment available and in order to make right investment choices we must consider the following parameters:
· Goals/Objectives – What does the Investment in which we seek to put
our money will achieve? Will it accomplish our goal in desired period?
· Investment Time Horizon: In order for the Investment plan to materialize and accrue the financial gain that we expect we must be clear in our head about the length of time period required to achieve the earning potential?
· Risk Class: What is the respective risk attached with various risk asset class and plan/option that we choosing to go with? Does that risk balance against the return expected from the options? Is the risk perception much higher than anticipated?
· Asset Class Mix: What is the mix of various class of Assets that are contained in this Investment option?
In this project we will stress on designing a superannuation plan for Katrina. She has joined a marketing ad agency after finishing her university studies with annual earnings of $1,20,000. She wants to build her Retirement corpus after she turns 65 years and like to have adequate funds for next 15-20 years.
· Best Investment Plan/Option with Time period or Investment Horizon of 10 Years is Highlighted in “Yellow” with Max. Returns of 9.77%.
· Whereas in our case study the Investment Horizon of 5 years is considered for which the Optimum Investment plan is highlighted in “Green” with Max. Return of 8.07%.
    Investment Options
    Type of Plan
    Return Horizon
    Returns
    Risk Class
    Asset Risk Mix
    Average Rate of Return
    Balance Option
    Triple S
    1 Month
    -0.71%
    High Risk
    60-90% Equity + Balance (Cash + Fixed Interest)
    8.26%
    
    
    3 Month
    -1.03%
    
    
    
    
    
    1 Yea
    -6.27%
    
    
    
    
    
    3 Yea
    5.07%
    
    
    
    
    
    5 Yea
    6.54%
    
    
    
    
    
    10 Yea
    8.26%
    
    
    
    
    Income Stream
    1 Month
    -0.32%
    
    
    
    
    
    3 Month
    -0.62%
    
    
    
    
    
    1 Yea
    -5.46%
    
    
    
    
    
    3 Yea
    5.33%
    
    
    
    
    
    5 Yea
    6.70%
    
    
    
    
    
    10 Yea
    8.25%
    
    
    
    
    TTR ‑ Income Stream
    1 Month
    1.14%
    
    
    6.87%
    
    
    3 Month
    0.85%
    
    
    
    
    
    1 Yea
    -1.08%
    
    
    
    
    
    3 Yea
    6.37%
    
    
    
    
    
    5 Yea
    6.87%
    
    
    
    
    
    10 Yea
    -
    
    
    
    
    Flexible Rollover Product
    1 Month
    -0.42%
    
    
    7.20%
    
    
    3 Month
    -0.77%
    
    
    
    
    
    1 Yea
    -4.82%
    
    
    
    
    
    3 Yea
    4.86%
    
    
    
    
    
    5 Yea
    5.95%
    
    
    
    
    
    10 Yea
    7.20%
    
    
    
    
    Super SA Select
    1 Month
    -0.16%
    
    
    6.15%
    
    
    3 Month
    -0.30%
    
    
    
    
    
    1 Yea
    -4.15%
    
    
    
    
    
    3 Yea
    5.15%
    
    
    
    
    
    5 Yea
    6.15%
    
    
    
    
    
    10 Yea
    -
    
    
    
    
    Lump Sum Scheme
    1 Month
    -0.74%
    
    
    8.24%
    
    
    3 Month
    -1.07%
    
    
    
    
    
    1 Yea
    -6.39%
    
    
    
    
    
    3 Yea
    5.06%
    
    
    
    
    
    5 Yea
    6.51%
    
    
    
    
    
    10 Year
    8.24%
    
    
    
    
    SA Ambulance
    1 Month
    -0.53%
    
    
    7.26%
    
    
    3 Month
    -0.82%
    
    
    
    
    
    1...
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