Corporate Finance 2020 Assignment Due date: 20 April 2020. Assignment to be submitted through Moodle. Attempt ALL Questions Question 1 (Total marks= 6) a) Suppose you deposit $1,000 into a savings account that earns interest at the rate of 4%, compounded annually. What would be the balance in the account: (i) after six years? (ii) after 20 years? (3 marks) (b) Ted wants to borrow from Fred. Ted is confident that he will have $1,000 available to pay off Fred in two years. How much will Fred be willing to lend to Ted in return for $1,000 two years from now if he uses a compounded interest rate per year of: (i) 5%? (ii) 15%? (3 marks) Question 2 (Total marks= 10) (a) An investor is considering the purchase of two investments at the end of Year 0 that will yield the following cash flows: Year Year 1 Year 2 Year 3 Year 4 End of Year Cash End of Year Cash Flow for Project X Flow for Project Y $12,000 $11,000 $13,000 $13,000 $14,000 $15,000 $15,000 $12,000 If the appropriate discount rate for these investments is 15%, what will this investor be willing to pay for the investments? (7 marks) (b) Suppose you wish to invest $2,000 today so that you have $4,000 six years from now. What must the compounded annual interest rate be in order to achieve your goal