Case study a. Let's say your friend offer simple investment. You are planning to buy an asset for RM 3350. This investment is very safe. You would sell off the asset in three years for RM 400. You know you could invest RM 335 elsewhere at 10 percent with very little risk. What do you think of the proposed investment?
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- Appledale Dairy is considering upgrading an old ice-cream maker. Extensive upgrading costs $11650 and saves $8080 in the first year. The savings then decrease by 17 percent each year thereafter. If the upgraded ice-cream maker will last for seven years, what is the present worth of the upgrade? Appledale's MARR is 9 percent.A man invests his savings in two accounts, one paying 6 percent and the other paying 10 percent simple interest per year. He puts twice as much in the lower-yielding account because it is less risky. His annual interest is 6534 dollars. How much did he invest at each rate? Your answer is total in the account paying 6 percent interest is total in the account paying 10 percent interest isLet's say that you invest $8000 at 3.1 percent annual interest for 6 years. What will its value be? Carefully follow all numeric directions. Round intermediate steps to four decimal places and final answers to two.
- You can invest in an account that pays simple interest or an account that pays compound interest. In either case, you plan to invest $2,900 today and both accounts have an annual interest rate of 8 percent. How much more interest will you receive in the 11th year in the account that pays compound interest?June has a small house, on a small street, in a small town. If she sells the house now, she will likely get $110, 000 for it. If she waits one year, she will probably receive more- say, $120,000. If she sells the house now, she can invest the money in a 1-year guaranteed growth bond that pays 8% annual interest, compounded monthly. What are the 2 options worth, and which should she choose?Suppose Ted deposits $10,000 in a savings plan earning 5% compounded annually and Tess deposits $10,000 ina savings plan earning 10% compounded annually. Both leave their money on deposit for 40 years. Because Tess’srate is twice as great as Ted’s rate, is it true that Tess will earn twice as much interest? Explain why or why not.Then show calculations to prove your point of view. What is the future value for each investment? N i PV PMT FV 5 10
- Many years ago, Julle deposited $14,490 into a savings account. Today, the balance of the account is $62,625. How long ago did she make the initial deposit if the annual interest rate on the account is 5 percent?How much money will be in a bank account at the end of 15 years if $100 is deposited today and the interest rate is 8 percent compounded annually?You have $10,000 to invest. Your bank offers the following 10 year CD's. Account 1 offers 6.85% simple interest. Account 2 offers 6.57% compounded annually. a. How much money will you have at the end of 10 years if Account 1 is chosen? s b. How much money will you have at the end of 10 years if Account 2 is chosen?S Account is the better choice.
- How much money will be in a bank account at the end of 15 years if $100 is deposited to day and the interest rate is 8 percent compounded annually?Ab 4 Economics Nabil is considering buying a house while he is at university. The house costs $200 000 today. Renting out part of the house and living in the rest over his five years at school will net, after expenses, $2000 per month. He estimates that he will sell the house after five years for $210 000. If Nabil’s MARR is 6 percent compounded monthly, should he buy the house? Use annual worth.1. You want to start to save for a major purchase. You can invest P320 every three months for 3 years and 9 months and you can earn 5.34% compounded quarterly. What is the amount of interest that you make during the entire term? 2. Jamie is saving $10,000 at the end of each month. How soon can she retire if she wants to have a retirement fund of F250,000.00 and interest is 4.36% compounded monthly?