2. (a) If a developer plans to purchase a site for $150,000,000 on borrowed money at 6 per cent and then to start a development before selling the completed scheme in 3 years later when the capital spent on the land with rolled-up interest will need to be repaid to the bank. How much the bank will be expecting when the scheme is completed in 3 years' time? (b) If a person deposits $200,000 at the end of every year in a savings account earning interest at 2% for 3 years and leaves the interest to accumulate, how much money will there be at the end of 3 years? (c) If a property management company wishes to replace a water supply system at $350,000 in 5 years by regular saving in a deposit account earning interest at 2% how much must be saved at the end of each year? (d) Calculate the value today of the right to receive an income of $400,000 at the end of each year for the next 3 years if a return of 2% is to be received from the purchase.
2. (a) If a developer plans to purchase a site for $150,000,000 on borrowed money at 6 per cent and then to start a development before selling the completed scheme in 3 years later when the capital spent on the land with rolled-up interest will need to be repaid to the bank. How much the bank will be expecting when the scheme is completed in 3 years' time? (b) If a person deposits $200,000 at the end of every year in a savings account earning interest at 2% for 3 years and leaves the interest to accumulate, how much money will there be at the end of 3 years? (c) If a property management company wishes to replace a water supply system at $350,000 in 5 years by regular saving in a deposit account earning interest at 2% how much must be saved at the end of each year? (d) Calculate the value today of the right to receive an income of $400,000 at the end of each year for the next 3 years if a return of 2% is to be received from the purchase.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:2. (a) If a developer plans to purchase a site for $150,000,000 on borrowed money at
6 per cent and then to start a development before selling the completed scheme
in 3 years later when the capital spent on the land with rolled-up interest will
need to be repaid to the bank. How much the bank will be expecting when the
scheme is completed in 3 years' time?
(b) If a person deposits $200,000 at the end of every year in a savings account
earning interest at 2% for 3 years and leaves the interest to accumulate, how
much money will there be at the end of 3 years?
(c) If a property management company wishes to replace a water supply system at
$350,000 in 5 years by regular saving in a deposit account earning interest at
2% how much must be saved at the end of each year?
(d) Calculate the value today of the right to receive an income of $400,000 at the
end of each year for the next 3 years if a return of 2% is to be received from the
purchase.
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