Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
PLEASE ANSWER ASAP
Transcribed Image Text:4
7.
8.
9.
10
EOY
20
21
22
23
24
25
26
27
28
29
30
CF
$300 $270 $240 $210 $180
Five deposits are made at the EOYS of years 2021-2025, as shown in the CF table above. If the interest rate is 6% compounded annually, what is
the amount in the account at the end of 2030?
2.
Expert Solution
Step 1
Given information :
| Year | Cash flows |
| 0 | $ - |
| 1 | $ 300.00 |
| 2 | $ 270.00 |
| 3 | $ 240.00 |
| 4 | $ 210.00 |
| 5 | $ 180.00 |
| 6 | $ - |
| 7 | $ - |
| 8 | $ - |
| 9 | $ - |
| 10 | $ - |
| Discount rate | 6% |
Since the question have not mentioned anything, I will be using excel for my calculations. I will first compute the present value at the time 0 of the cash flow stream and will then compound it to the end of 10 years.
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