Question

1. 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?

2. 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%?

3. 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?

4. 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