PROJECT OUTLINE

Down payment is 15% of the property’s total cost  

0.15 x 800,000= 120,000 

800,000 downpayment= 120,000 

80,000 savings  

40,000 into stocks (+7.5% growth per year) 

40,000 into Non-redeemable GIC (4.2% annual return rate)

DATA AND SOLUTIONS

STOCKS – $40,000

Year one  

7.5% of 40,000 = 3,000 

40,000 + 3,000 = 43,000 

Year two  

7.5% of 43,000 = 3,225 

43,000 + 3,225 = 46,225 

Year three  

7.5% of 46,225 = 3,466.87 

46,225 + 3,466.87 = 49,691.87 

Total earnings after three years in stocks  = 49,691.87 

THREE YEAR NON-REDEEMABLE GIC – $40,000

Year one  

Starting balance – 40,000 

Yearly return – 4.2%  

4.2% of 40,000 = 1,680 

1,680 + 40,000 =41,680 

Year two  

Staring balance – 41,680 

Yearly return – 4.2% 

4.2% of 41,680 = 1,750.56 

1,750.56 + 41,680 = 43,430.56 

Year three  

Starting balance – 43,430.56 

Yearly return – 4.2% 

4.2% of 43,430.56 =1,824.08 

1,824.08 + 43,430.56 = 45,254.64 

Final GIC account balance after three years = 45,254.64  

TOTAL SAVINGS AFTER 3 YEARS

GIC + Stock investments + annual income total savings  

45,254.64 + 49,691.87 + 30,000 = 124,946.51 

VISUAL

ONE YEAR DOWNTURN SCENARIO

Year Of Downturn Calculations in stocks – (third year –3.0% Downturn) 

Year 1 

7.5% of 40,000 = 3,000 

40,000 + 3,000 = 43,000 

Year 2  

7.5% of 43,000 = 3,225 

43,000 + 3,225 = 46,225 

Year 3 

-3.0% of 46,225 = -1386.75 

46,225 -1386.75 = 44,838.25 

Total savings after three years in stocks with downturn  

44,838.25 

Total savings after three years in GIC and stocks with one year downturn 

44,838.25+30,000+ 45,254.64= 120,092.89 

As you can see, if I were to experience a one-year downturn in my stock investments, then I would still meet the amount required for a down payment however ,it would leave me with only $92.89 left over which is far from ideal.  

JUSTIFICATION

After splitting $80,000 in half and putting one half in stocks with an annual return rate of 7.5% for three years and the other half in a three year non-redeemable GIC, I came up with $124,946.51 which is more than I needed for a down payment on the house. I think splitting the money evenly is a good strategy. It requires a minimal to moderate amount of risk with good odds of success. Putting half of my original savings into stocks is a risk. If the return percentage grows each year that my money is in stocks, then I will end up with the amount of money I need for a down payment on the house with a little extra. If the stock return rate goes down for one year, then I barely have enough for the down payment of $120,000 after three years of saving.

I considered the option of using a higher risk strategy as well as a lower risk strategy. After weighing the options and considering the pros and cons of each option I decided that putting half of the savings into each account was the perfect middle ground. If I were to put more money into stocks, I would most likely end up with more money than I would if I had if I split the savings equally. But that’s assuming that all three years in stocks offer me growth in my balance which may not be the case. I had to consider the fact there may be some decline in the stock market which could leave me with less money than I started with.

COLLABORATION AND CONTRIBUTIONS

 

• How did you find working with your group? 

I like working in groups. It makes any project or assignment more fun and engaging for everyone involved. We all did our part in writing and doing the calculations. My group was very cooperative, and everyone was focused and engaged in the work. 

– How did you contribute to the group? And how did others in the group contribute to your learning? 

Not just myself but everyone in our group all voiced their own opinions. If at any time all of us were confused or stuck or may have come up with a different solution than everyone else in the group, then we all made sure to go back and review the calculation so that we all had the same answer and so that we all understood the steps in getting there. 

• Did you use the solution proposed by your group? Why or why not?  

Yes. I decided to use our group’s solution. I just decided that it would be easier because I played a part in coming up with the step-by-step process as to how we found that solution in the first place. So, I was already familiar with the calculation that we had done, and I didn’t see any reason to do the entire process all over again. 

• How would you rate your ability to collaborate with others in your group on a scale of 1-4 (1 not good; 4- excellent) 

I’d say that my ability to collaborate with others on a scale of 1-4 is around 3 to 4. I really enjoy group work. I’m good at coming up with ideas and explaining those ideas to the other people in the group. I’m also pretty good at building off other people’s ideas and it’s just more fun than doing the work by yourself.  

CORE COMPETENCY REFLECTION

 

• I can work with others to achieve a goal. 

I really like working in groups. I like to think that I’m good at it. I’m good at distributing tasks evenly between every member of the group to ensure that everyone plays an equal part in the completion of the project, and I think I work well with others. I’m good at communicating my ideas.

• When I need to work collaboratively with people I don’t know well, I… 

When I’m put in a group with other people, I think it’s important to make everyone feel comfortable and like they are a part of the discussion, so I always try to start a conversation. Making sure that everyone is following along is also very important, which is why every once and a while I will stop and check that everyone understands and that no one is left behind.  

• In discussions and conversations, I help to build and extend understanding by… 

I’m a person who likes to make a lot of connections in discussions and talk about my own experiences that relate to the topic. I also find that using metaphors or simplistic scenarios to communicate and explain a point is often helpful. I do that because in my experience it’s a lot easier to understand something or grasp a concept when you can visualize it in your mind. 

• I can encourage others to share their voices and value diverse perspectives. 

When I’m in a group, if I ever notice anyone who is a little bit reserved or isn’t contributing to the discussion I always try my best to encourage them and give them opportunities to share what they are thinking. Getting the perspective of everyone in the group is important because everyone’s opinions are valuable and can improve the finished project. So, I think it’s important that everyone tries their best to encourage the people around them so as not to overlook the perspectives of any member of the group.