The mathematics they should be teaching in year 12 at High School:
Q1: Jocasta incurs HECS debt at 1 January and 1 July for three years while completing her university degree. Each time $5,000 of new debt is incurred. On 1 June each year any of the outstanding debt that has aged past eleven months of the date that it was first incurred and any prior indexation of debt is indexed at 7% per annum. After completing her degree how long will Jocasta take to settle the debt if she repays $4,000 a year and indexation continues at 7%?
Q2: Wally has the money to pay his HECS upfront for his whole degree. If Wally incurs HECS at $6,000 at each of 1 January and 1 July for three years, and any outstanding debt that has aged past eleven months from the date it was first incurred is indexed at 7% per annum, how much should he put aside to repay the full HECS debt immediately following its final indexation of 1 June the year after he finishes his degree. Wally can invest his money at 5% per annum.
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Q3. Winona incurs HECS debt at 1 January and 1 July for three
years while completing her university degree. Each time $7,500 of new debt is
incurred. On 1 June each year any outstanding debt that has aged past eleven months of the date it was first incurred and any prior indexation is
indexed at 7% per annum. If Winona pays an identity broker for new identification
documents the day that she finishes her degree, thus abandoning any risk of
being pursued for the HECS debt, how much has Winona saved net of the broker’s $10,000
fee?
Shalom,
Ozhamada
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