MUST SHOW ALL WORK

2. We sometimes need to find how long it will take a sum of money (or anything else) to grow to some specified amount. (a) For example, if a company's sales are growing at a rate of 18% per year, approximately how long will it take sales to triple? (1 point) (b) If you want an investment to double in 3 years, what interest rate must it earn? (1 point) 3. (a) What is the difference between an ordinary annuity and an annuity due? (2 points) (b) What type of annuity is shown in the following cash flow timeline? (1 point) 0 1 2 3 200 200 200 (c) How would you change it to the other type of annuity? (Think about the cash flows) (1 point) 4. (a) What is the future value of a 3-year ordinary annuity (recall that ordinary annuities have end of year cash flows) of $200 if the appropriate interest rate is 12%? (1 point) (b) What is the present value of $200 to be received in three years if the appropriate interest rate is 12% (annual compounding)? (1 point)