Question 1

1a. Iftheannualinterestrateis3percent, howlongwouldyouhavetowaitbeforea$24,000investmentat least doubles in value?

Assumingannualcompounding,compute theminimumnumber ofyearsrequired.

1b. Jack is celebrating his 24^th birthday today. He wants to start saving in one year's time,andretire afterhis70^thbirthday.Hedecides todepositthesameamount ofmoneyonhisbirthday each year in a bank which offers 3% interest per year, compounded annually.Jack hopes to be able to accumulate SGD 700,000 for his saving account, after he madehisscheduled deposit on 70^thbirthday).

Determinethe amounthe mustdeposit annually.Roundtonearestdollar.

1c. YoucaninvestSGD100,000infixeddepositwithabank.Thetermofthedepositis6years, and thedeposit ratequoted is 3.6%.

Calculatetheamount(round to2decimalplaces)youwillhavein6years,uponmaturityofthis fixed deposit, ifthe3.6%is an APRbut compounded quarterly.

1d. You own a company. This company's projected revenue is $30,000 for year 1, $31,000foryear2, and $32,000foryear3. From the4thyearonwards, revenueisexpectedto be5% higher than the previous year. Assume the appropriate nominal discount rate is 8%,andall revenueis collected at theend ofeach year.

Determinethepresentvalue ofyoursalesrevenueforthefirst15years,roundto2decimalplaces.