Suppose you are to receive the following cashflows in the future, at the times indicated below. (a) Assuming that you deposit all cashflows into a savings account that earns interest at a rate of 3.6% nominal, convertible 12 times per annum, what is the accumulated value of your savings in exactly 21 years time?

(b) Repeat part (a), but with the following interest / earning rates applying: [i] (1) i = 7.3% ____________________________________ [ii] (0.5) i =7.3% ____________________________________ [iii] (2) i = 7.3% ____________________________________ [iv] (4) d = 7.6% ____________________________________

(c) What does the interest / earning rate have to be, in order for the accumulated value in 21 years' time to be equal to $1 million? Give your answer in terms of i, the annual effective rate of interest, to 3 significant figures. _________________________________

(d) What does the interest / earning rate have to be, in order for the accumulated value in 21 years' time to be equal to $350,000? Give your answer in terms of i, the annual effective rate of interest, to 3 significant figures. _________________________________

Question 3 (10 marks) Suppose you are to receive the following cashows in the future, at the times indicated below. (a) Assuming that you deposit all cashows into a savings account that earns interest at a rate of 3.6% nominal, convertible 12 times per annum, what is the accumulated value of your savings in exactly 21 years time? Hint: Use Excel! Time from now ears Cashow Time from now ears Cashow 0.5 10,450 13.25 2,443 7,432 14 41,557 3 49 534 14.5 5 169 4 2 416 15.5 4 253 55 921 18 2 400 5555 19.5 21557 12.75 59,203 19.75 6,715 (b) Repeat part (a), but with the following interest I earning rates applying: [i] i'" = 7.3% [ii] :10" = 7.3% [iii] 1"" = 7.3% [iv] d'" = 7.6% (c) What does the interest I earning rate have to be, in order for the accumulated value in 21 years' time to be equal to $1 million? Give yOur answer in terms of 1', the annual effective rate of interest, to 3 signicant gures. (d) What does the interest I earning rate have to be, in order for the accumulated value in 21 years' time to be equal to $3 50,000? Give your answer in terms of i, the annual effective rate of interest, to 3 signicant gures