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You are offered an investment today by your broker. This investment offers the following stream of cash flows: Yr 1 = $10,000 Yr _2 =

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You are offered an investment today by your broker. This investment offers the following stream of cash flows: Yr 1 = $10,000 Yr _2 = $12,000 Yr _3 = $11,000 Yr _4 = $18,000 If you require a return of 11% for investments of this type of risk, how much should you pay for the investment today? Suppose you will deposit the following amounts into your savings account, earning 7% annually compounded interest. How much you will have at the end of the 4 year? Yr _1 = $1,000 Yr _2 = $2.000 Yr _3 = $3.000 Yr _4 = $4,000 Jamie wants to buy a new car on her 18th birthday. She is l4now. She expects her new car to cost $15,000. If she can earn 4% interest on her savings account, which is quarterly compounded, how much does she need to deposit at the end of each quarter? One year from now, you deposit $500 in a savings account. You deposits $1, 800 the next year. Then you wait two more years (until 4 years from now) and deposit $1,000. If your account always cams 6% annual interest and you make no withdrawals, how much will be in the account 11 years from now? You deposit $5000 for 5 years at 4% annual interest. In 5 years, you add $15,000 to your account, but the rate on your account changes to 8% annual interest (for existing balance and new deposit) You leave the account untouched for an additional 10 years. How much do you accumulate? You are interested in saving money for your first house. Your plan is to make regular deposits into a brokerage account which will earn i4 percent. Your first deposit of $5,000 will be made today. You also plan to make four additional deposits at the beginning of each of the next four years. Your plan is to increase your deposits by 10 percent a year. That is, you plan to deposit $5, 500 at t = 1, and $6.050 at t = 2, etc.) How much money will be in your account after five years? You take out a $250,000 30 year mortgage with monthly payments and a rate of 10%, monthly compounded. What will your mortgage balance be after your first year of making your monthly payments? How much total interest you paid on this mortgage

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