Question
Question 1: (8 Marks) a) On your birthday, your uncle gave you the money in his savings account. His only deposit was Rs.10,000 made 50
Question 1: (8 Marks) a) On your birthday, your uncle gave you the money in his savings account. His only deposit was Rs.10,000 made 50 years ago. The savings account paid 8% compounded annually. How much money is in the account today? b) A loaf of bread costs Rs.2.40 today. If its price increases by 6% per year, how much will an equivalent loaf cost in 20 years? c) A stock has paid dividends regularly for the last 20 years, starting with Rs.1.50 in 1964 and rising to Rs.4 in 1984. If these dividends have been growing at a constant rate, what has that rate been for the last 20 years? d) If the discount rate is 12%, what is PV10 of Rs.3,000 received at the end of each of the next 10 years except for the fourth year?
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