Question

- If you deposit $1000 in one year, $2000 in two years and $3000
in three years, $4000 in four years, $5000 in five years. How much
will you have in five years at
**9**percent interest? How much in 10 years if you add nothing to the account after the fifth year?

- a) Suppose you invest $2500 in a mutual fund today and $5000 in
one year. If the fund pays
**9**% annually, how much will you have in two years?

b) Suppose you plan to deposit $2500
into an account in one year and $5000 into the account in three
years. How much will be in the account in five years if the
interest rate is **9**%?

- You are offered an investment that will pay $1000 in year 1,
$2000 the next year, $3000 the following year, and $4000 at the end
of the 4
^{th}year. You can earn**9**% on similar investments. What is the most you should pay today for this one?

- a) You are considering an investment that will pay you $1,000
in one year, $2,000 in two years and $3,000 in three years. If you
want to earn
**9**% on your money, how much would you be willing to pay?

Answer #1

Future Value | ||||||

Last period= | 5 | |||||

Compounding rate | 9.000% | |||||

Year | 0 | 1 | 2 | 3 | 4 | 5 |

Cash flow stream |
0 | 1000 | 2000 | 3000 | 4000 | 5000 |

Compounding factor | 1.539 | 1.412 | 1.295 | 1.188 | 1.090 | 1.000 |

Compounded cash flows | 0.000 | 1411.582 | 2590.058 | 3564.300 | 4360.000 | 5000.000 |

FV = Sum of compounded cash flows | ||||||

FV= | 16925.94 | |||||

Where | ||||||

Compunding factor = | (1 + rate)^(Last period-Corresponding period in years) | |||||

Compounded Cashflow= | Cash flow stream*compounding factor |

Future Value | ||||||

Last period= | 10 | |||||

Compounding rate | 9.000% | |||||

Year | 0 | 1 | 2 | 3 | 4 | 5 |

Cash flow stream |
0 | 1000 | 2000 | 3000 | 4000 | 5000 |

Compounding factor | 2.367 | 2.172 | 1.993 | 1.828 | 1.677 | 1.539 |

Compounded cash flows | 0.000 | 2171.893 | 3985.125 | 5484.117 | 6708.400 | 7693.120 |

FV = Sum of compounded cash flows | ||||||

FV= | 26042.66 | |||||

Where | ||||||

Compunding factor = | (1 + rate)^(Last period-Corresponding period in years) | |||||

Compounded Cashflow= | Cash flow stream*compounding factor |

Please ask remaining parts seperately |

you
plan to deposit $2000 today $4000 in one year and $2000 in two
years into an account earning 5.4% interest what will the account
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1) You plan to deposit $2000 each year into an account for the
next 5 years. The discount rate is 12% for the next 3 years and 15%
after that. What is the value today of your 5 deposits of $2000
each?
2) An investment pays no cash flows for the next 3 years. After
three years, the investment pays $1000 per year for 10 years. After
that, the investment pays $2000 per year forever. The appropriate
discount rate is...

You
deposit $10000 to open an investment account. The account will earn
8% interest. Two years after that deposit, you put $2500 in the
account. Two years after that, you withdrawal $3000 from the
account. How much money will be in the account at the end of year
6?

Two years ago, you opened an investment account and deposited
$5,000. One year ago, you added another $2,000 to the account.
Today, you are making a final deposit of $7,500. How much will you
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Suppose that at the end of each of the next 50 years you will
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What if the first deposit will occur one year from now?

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format without $ sign or thousands comma -> 3519.23 and not
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You deposit $2000 in an account earning 3% interest compounded
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How much will you have in the account in 20 years?
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How much will you have in the account in 25 years?
How much interest will you earn?

1/ You deposit $3000 at the beginning of each year into an
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Round to the nearest year.

1. If you deposit $1600 into an account paying 8% compounded
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