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a) With a 7% discount rate, determine the value on 1 January 2023 of the following cash flows: b) Ravindran has been depositing money at
a) With a 7% discount rate, determine the value on 1 January 2023 of the following cash flows: b) Ravindran has been depositing money at the end of each year into an account drawing 6.5% compound interest per annum. Calculate the balance in the account at the end of year four if he deposited the following amounts: (5 marks) Page 3 of 7 BBF201/03 INTRODUCTION TO FINANCIAL MANAGEMENT SEPT 2022 ASSIGNMENT 2 c) You invest RM2,500 at a variable rate of interest. Initially, the rate is 5% compounded annually for the first year, and the rate increases half percent annually (0.5%) for five years. Compute how much will you have in the account after five years. (3 marks) d) Mr Chong is planning to start saving for his son's college education fund. When the time comes, he wishes to accumulate RM45,000 at the end of 17 years. Assuming that his savings account will pay 6.5% compounded annually, calculate how much would he will have to deposit if: i) he wants to deposit an equal amount at the end of each year. ii) he wants to deposit one lump sum today. (8 marks) e) An investment will pay RM500 in three years, RM700 in five years, and RM1,000 in nine years. If the opportunity rate is 6%, calculate the present value of this investment
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