Assume you make monthly deposits of $3,000 now into an account that pays 12% per year, compounded monthly. If you want to know the total amount after 2 years, the value of interest rate (i) you should use in the F/P factor is:

Select one:

a. 1%

b. 3%

c. 12%

d. 24%

An alumni of Jamia Millia Islamia wanted to set up an endowment fund that would award scholarships to engineering students totaling $1,00,000 per year for ever. The first scholarships are to be granted now and continue each year for ever.

How much should the alumnus donate now, if the endowment fund is expected to earn interest at a rate of 10% per year?

Select one:

a. cc= -$110000

b. cc= -$1100000

c. cc= -$2200000

d. cc= -$3300000

Any cash-flow diagram problem will have two cash flows: one each for the borrower and lender.

Select one:

True

False