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Problem 1 (10 points) : A sum of $20,000 is invested at an annual rate of interest of 10%, compounded annually. 1. a (5 points).
| Problem 1 (10 points): A sum of $20,000 is invested at an annual rate of interest of 10%, compounded annually. | |||||||
| 1. a (5 points). What is the value of the investment 5 years after the investment? | |||||||
| 1.b (5 points). What is the value of the investment if compounded monthly? | |||||||
| Solution to 1.a | Solution to 1.b. | ||||||
| Number of Years | N | ||||||
| Annual interest rate | I/Y | ||||||
| Present value | PV | ||||||
| Payment | PMT | ||||||
| Payment type | PMT type | ||||||
| Future value under annual compounding | FV under monthly compounding | ||||||
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The Value Investor's Handbook
Authors: Andrew P.C.
1st Edition
1098810449, 978-1098810443
