Reference no: EM132523970

Harry Runkle has a weakness. He likes cars. The new Porsche Cayman looks so good on the showroom floor that he could barely control himself. He managed to escape the salesman but has been thinking about the car night and day. It is priced at $149,000. He can get 0% finance for five years with weekly repayments of $399. At the end of the five years (read the fine-print!), Harry will have to pay the remaining balance. Bearing in mind that he already has a nice car, how much could Harry save over the next ten years if: (a) he puts $399 each week into a managed fund earning 5 percent p.a. (adjust this for weekly compounding); (b) takes the total accumulated sum at the end of five years and adds to it the balance that would have been outstanding on the car loan and invests the total for a further five years into the same managed fund earning 5 percent p.a.?