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Abraham is getting married and his father agrees to lend him R1 000 000, repayable...

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Accounting

Abraham is getting married and his father agrees to lend him R1 000 000, repayable after ten years (interest free), to buy a suitable house. Abraham decides to rather buy a cheaper house and invested the remaining amount for ten years to accumulate R1 000 000 so that he will be able to repay his father.

a)Calculate the amount that Abraham would have to invest at 8.15% per annum compounded monthly for 10 years to repay his father?

b) Calculate the maximum amount he would have available to buy a cheaper house.

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