1. if you invest $4,000 today at 10% interest, what is the value of the investment at the end of 5 years? 2. if you invest $1,000 at the end of each of the next five years and the investment earns 10% interest, what is the value of the investment at the end of 5 years? FV factor at 10% at year 5 is 1.6105 (Table A-1 Futures for one dollar compounded) FV annuity factor at 10 for 5 years is 6.1051 (table A-2 future value interest factors for a one-dollar Annuity) Requirement: solve the above two cases ( the cases are independent). What is the account rate of return? (ignoring taxes)
1. if you invest $4,000 today at 10% interest, what is the value of the investment at the end of 5 years? 2. if you invest $1,000 at the end of each of the next five years and the investment earns 10% interest, what is the value of the investment at the end of 5 years? FV factor at 10% at year 5 is 1.6105 (Table A-1 Futures for one dollar compounded) FV annuity factor at 10 for 5 years is 6.1051 (table A-2 future value interest factors for a one-dollar Annuity) Requirement: solve the above two cases ( the cases are independent). What is the account rate of return? (ignoring taxes)
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....
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solve the following two cases (the cases are independent).
1. if you invest $4,000 today at 10% interest, what is the value of the investment at the end of 5 years?
2. if you invest $1,000 at the end of each of the next five years and the investment earns 10% interest, what is the value of the investment at the end of 5 years?
FV factor at 10% at year 5 is 1.6105
(Table A-1 Futures for one dollar compounded)
FV
(table A-2
Requirement:
solve the above two cases ( the cases are independent).
What is the account
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