Calibri (Body) 11 Paste 8 7 I Marge A Cat E19 x fx B D F G H Problem 2 (4x5 = 20 points) 3 2.1 A firm borrows $255,000 from the bank at 6 peront compounded annually to expand the production capacity. This loan is to be reptid in equal installments at the end of each yent over the next 14 years. How much will each annual payment be? 255,000 4 5 6 FV 7 T 6% 8 NPER 14 9 PMT (52 14 15 PMT1C7, C8,C6,0,0) 10 12 2.2 13 14 15 Jonathan has $35,000 to invest, and he found through Facebook a hedge fund that promises that with its innovative, aggressive investment strategy the investments grow by a factor 10 in 6 years, or in other words: Jonathan's S35,000 would grow to $350,000 in 6 years time, What is the annual rate of return that the age fund needs to make this happen? FV 350,000 PV NPER R 16 17 35,000 18 6 19 47% 20 21 2.3 22 How much do you have to deposit today so that you can withdraw $5,000 per year in the first five years, then $10,000 per year for the following five years, and $50,000 per year in the last ten years? Assume an interest rate of 7 percent annually. 23 24 year cash flow 25 1 5,000 5,000 26 2 27 3 5,000 28 4 29 5 5,000 5,000 10,000 30 6