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QUESTION THREE ( 2 5 Marks ) 3 . 1 You are considering an investment opportunity that promises to pay you R 1 0 ,
QUESTION THREE Marks
You are considering an investment opportunity that promises to pay you R in exactly years. If
the annual interest rate is what is the present value of this
investment?
You deposit R into a savings account that pays an annual interest rate of How much will you
have in the account after years?
You are offered an investment that will double your money in years. What is the implied interest rate
of this investment?
You invest R in a bond that promises to triple your money. If the bond pays an annual interest rate
of how long will it take for your investment to triple?
Explain in detail why understanding the concept of time value of money is essential for financial decision
making.
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