INSTRUCTIONS: You are required to respond to both questions below and adhere strictly to the word limit, where prescribed. You must post your response first to be able to see others' responses. Assessment guidelines are as follows: Assessment category 1: Your initial post containing responses to the two questions below = 3 out of 5 points Assessment category 2: Contributions to your peers' posts = 2 out of 5 points. To obtain points in this category, you must comment on at least two posts from your peers. Your initial response should be posted in response to the initial post entitled "Post your responses here" The forum closes for new responses on October 17, 2021. Please be mindful of the date QUESTIONS: Question 1 (1.5 points) John and Marsha are in an argument about an investment which requires a series of six annual deposits. If an investor decides to invest, he/she has to deposit $30,000 at the end of year 1, $30,000 at the end of year 2, $30,000 at the end of year 4, $30,000 at the end of year 5, $30,000 at the end of year 6 and $30,000 at the end of year 7. The deposited amounts grow at a rate of 5% p.a. The argument is about the nature of the cash flow stream of the six deposits – whether the cash flows are an annuity or a mixed stream. As per John’s opinion, the value of this investment at the end of year 7 will be $244,260.25 while Marsha thinks that the value of this investment at the end of year 7 will be $207,795.07 You are required to assist both in coming to a resolution of the argument by doing as follows: i) As per your own understanding of the cash flow pattern of deposits presented above, compute the value of the investment at the end of year 7. Clearly highlight all computational steps. (1 point) ii) Clearly indicate who, amongst John and Marsha, is conceptually correct in terms of the type of cash flow stream and why? If you feel that the cash flow stream is an annuity, state your reasons. If you think it is a mixed stream, state your reasons within 50-100 words. (0.5 point)
INSTRUCTIONS:
You are required to respond to both questions below and adhere strictly to the word limit, where prescribed.
You must post your response first to be able to see others' responses.
Assessment guidelines are as follows:
Assessment category 1: Your initial post containing responses to the two questions below = 3 out of 5 points
Assessment category 2: Contributions to your peers' posts = 2 out of 5 points. To obtain points in this category, you must comment on at least two posts from your peers.
Your initial response should be posted in response to the initial post entitled "Post your responses here"
QUESTIONS:
Question 1 (1.5 points)
John and Marsha are in an argument about an investment which requires a series of six annual deposits.
If an investor decides to invest, he/she has to deposit $30,000 at the end of year 1, $30,000 at the end of year 2, $30,000 at the end of year 4, $30,000 at the end of year 5, $30,000 at the end of year 6 and $30,000 at the end of year 7. The deposited amounts grow at a rate of 5% p.a.
The argument is about the nature of the cash flow stream of the six deposits – whether the cash flows are an
You are required to assist both in coming to a resolution of the argument by doing as follows:
i) As per your own understanding of the cash flow pattern of deposits presented above, compute the value of the investment at the end of year 7. Clearly highlight all computational steps. (1 point)
ii) Clearly indicate who, amongst John and Marsha, is conceptually correct in terms of the type of cash flow stream and why? If you feel that the cash flow stream is an annuity, state your reasons. If you think it is a mixed stream, state your reasons within 50-100 words. (0.5 point)
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