Question
1. you decided to invest 100,000 in a program that guaranteed to grow 2.5% for each of the next 5 years. At the end of
1. you decided to invest 100,000 in a program that guaranteed to grow 2.5% for each of the next 5 years. At the end of year 5, how much isyour investment worth?
2. what is the effective annual rate of an investment that pays 6.5% for 5 years, compounding semiannually?
3. what is the present value of a single cash flow of $25,000received at the end of 10years if we assumea discount rate of 5% annually. b) with a discount rate of 7%?
4. suppose you deposited $100 in a savings account that compounds annually at 2%? After year 1 at this rate, the bank change its rate to compounding to 1.5%annually. Assuming the compounding rate does not change for 4 additionally yrs., how much will your account be at the end of 5yr. period?
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