Financial investment

If you invest $100 at an interest rate of 15%, how much will you have at the end of eight years?

Discount factors if the PV of $139 is $125, what is the discount factor?

Present values if the cost of capital is 9%, what is the PV of $374 paid in year 9?

You have invested $60,476 at 8%. After paying the above school fees, how much would remain at the end of the six years?

Discount factors and present values

a. If the one-year discount factor is .905, what is the one-year interest rate?

b. If the two-year interest rate is 10.5%, what is the two-year discount factor?

c. Given these one- and two-year discount factors, calculate the two-year annuity factor.

d. If the PV of $10 a year for three years is $24.65, what is the three-year annuity factor?

e. From your answers to (c) and (d), calculate the three-year discount factor.

 

Solution:

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