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4 Mohamed is considering investing his money in a project. In order to become a partner in the project, he'll have to pay 100,000 after
4 | Mohamed is considering investing his money in a project. In order to become a partner in the project, he'll have to pay 100,000 after 2 years from now. How much money should he have today in order to be able to invest in the project if the current interest rate is 7% compounded monthly? | |||||||||||||
5 | A couple plans to set aside $20,000 per year in a conservative portfolio projected to earn 7 percent a year. If they make their first savings contribution today, how much will they have at the end of 20 years? | |||||||||||||
You are offered 2 financial instruments (A & B) with the following cash flows. Each of the financial instrument is sold at a market price today L.E 135,000 which financial instrument will you buy? | ||||||||||||||
6 | ||||||||||||||
Market Price | 135,000 | |||||||||||||
Current Year | 2023 | |||||||||||||
Instrument A | Year | 2024 | 2025 | 2029 | 2031 | 2035 | 2040 | 2045 | 2047 | 2050 | 2051 | 2052 | ||
Cash Inflow | 60,000 | 10,000 | 25,000 | 20,000 | 14,000 | 35,000 | 55,000 | 70,000 | 100,000 | 120,000 | 150,000 | |||
r | 17% | |||||||||||||
Instrument B | Year | 2023 | 2024 | 2025 | 2026 | 2028 | 2029 | 2030 | 2032 | 2035 | 2040 | 2042 | 2044 | 2046 |
Cash Inflow | 40,000 | 24,000 | 36,000 | 20,000 | 24,000 | 32,000 | 40,000 | 45,000 | 20,000 | 55,000 | 65,000 | 70,000 | 75,000 | |
r | 17% | |||||||||||||
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