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If a RM10,000 investment will return RM25,000 to you in five years, then to the nearest percent what annual interest rate is being offered?
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- How much must be invested now to receive $30,000 for 10 years if the first $30.000 is received one year from now and the rate is 8%?If you invest $15,000 today, how much will you have in (for further instructions on future value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%You have RM 5,000.00 you want to invest for the next 45 years until retirement. You are offered an investment plan that will pay you 6 percent per year for the next 15 years and 10 percent per year for the last 30 years.a) Explain the time value of money principleb) Identify the underlying assumption of the time value of money principlec) Draw a graph that illustrates the relationship between interest rates and the present value of RM 1,000.00 to be received in one year.d) Suggest how you can minimize the amount of cash you must invest in order to reach your retirement goal.e) Compute the amount you will have at the end of the 45 years.f) Calculate the amount you would have if the investment plan pays 10 percent for the first 15 years and 6 percent per year for the next 30 years.
- Suppose you are going to receive $5,000 per year for 8 years. The appropriate interest rate is 10 percent. What is the present value of the payments if they are in the form of an ordinary, a. anhuity? b. What is the present value if the payments are an annuity due?Suppose you are offered an investment that will allow you to double your money in 9years. You have R20 000 to invest. What is the implied rate of interest?What is the value of an investment today, if it pays P250 interest forever and the appropriate interest rate is 5%?
- An investment opportunity requires that you deposit $1000 a year for 5 years. At the end of this time you will receive $500 a year for 10 years. Is this a good deal if the interest rate available on other deposits is 5%?Consider an investment that offers $4,000, $5,000 and $6,000 in the next 3 years, with the first payment occurring one year from now. The required return is 7%. What is the present value of this investment?2. Find the future value of OMR10,000 invested now after five years if the annual interest rate is 8 percent. a. What would be the future value if the interest rate is a simple interest rate? b. What would be the future value if the interest rate is a compound interest rate?
- What would you pay for an investment that pays you $5200000 after twenty years? Assume that the relevant interest rate for this type of investment is 6%.(Present Value of an Income Stream)Suppose the market interest rate is 10 percent. Would you be willing to lend $10,000 if you were guaranteed to receive $1,000 at the end of each of the next 12 years plus a $5,000 payment 15 years from now? Why or why not?1.If you put up $40,000 today in exchange for a 7.65 per cent, 20-year annuity, what will the annual cash flow be?. Single choice. 2.An investment offers $6,100 per year for 15 years, with the first payment occurring today. If the required return is 6 percent, what is the value of the investment?. Single choice.