(a) When you first started University, you also won a lottery prize of £10,000 and decided to invest it, to buy a car wh
Posted: Wed Jul 06, 2022 6:42 pm
(a) When you first started University, you also won a lotteryprize of £10,000 and decided to invest it, to buy a car when yougraduate, three years later. You were able to deposit your money ina high-performance savings account that pays an annual interestrate of 6%. Calculate:
i) How much interest you will earn for the three years, if youwere earning simple interest.
ii) How much interest you will earn for the three years, if youwere earning quarterly compounded interest.
iii) How much will your investment be worth when you graduate,if the interest was compounded monthly for the three-yearperiod.
Another company is considering two investment projects that have the following cash flows: i) ii) Year 0 1 2 3 Project X -250 150 125 200 Project Y -300 450 If the company's discount rate is 12%, which project should be chosen and why? What is the internal rate of return (IRR) from Project Y?
i) How much interest you will earn for the three years, if youwere earning simple interest.
ii) How much interest you will earn for the three years, if youwere earning quarterly compounded interest.
iii) How much will your investment be worth when you graduate,if the interest was compounded monthly for the three-yearperiod.
- A When You First Started University You Also Won A Lottery Prize Of 10 000 And Decided To Invest It To Buy A Car Wh 1 (31.05 KiB) Viewed 9 times