Romeo is an entry-level employee in Aldi Store in Oldham who is trying to understand his financial situation. Romeo currently lives 15 miles away from his workplace. He currently works part time and earns £1,800 per month. Romeo likes to save £405 per month i.e., £4,860 per annum from his part-time job. He transfers £4,860 into his savings account at the end of every year.
As to the following accommodation expenses table published by the Oldham Council, employees were randomly selected to help understand the weekly accommodation expenses and distance to their workplace.
A. Let's say Romeo saves £4,860 each year for the next 6 years, starting from Jan 01, 2024. If Romeo savings account pays a simple interest rate of 4.5% per annum and he always keeps the interest in his savings account, what will be the balance in Romeo's savings account on Dec 31, 2030?
Assuming Romeo saves £4,860 per annum, for six years. How much will be the balance in his savings account, if his savings account pays a compounding interest rate of 4.0% per annum and he always keeps the interest in his saving account?
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