Decision and Risk Analysis

You invested $$5,000$ eight years ago, and you want to determine the value of the investment now, at the end of year $8.$ During the past eight years, the nominal interest rate has fluctuated as follows:

$\backslash$table$[[,\backslash$table$[[$Nominal interest$],[$Year$]]],[1,$rate $(\%$ p$.$a$.)],[2,4],[3,5],[4,8],[5,6],[6,4],[7,5],[8,4]]$

If your investment is compounded daily, how much is it worth today? $($Ignore the effect of leap years$)$

$2.$ The cash flows for a bank account are described by the discrete CFD in Figure P$9\mathrm{.}22.$ The bank account has an effective annual interest rate of $4\mathrm{.}5\%.$

a$)$ Calculate the future value of all cash flows after $15$ years.

b$)$ Calculate the future value of all cash flows after $25$ years assuming that there are no more transactions after $15$ years.