Question

r money r t which m in th You want to invest $10.000 in a business opportunity you will receive $13.000 m ythe money is in your a Any of 51 ) ( U roctor from the PV e borty you will receive 11000 Back if you pre money st, compounded any Value of 1. Present Value of Future in the business for the years, you Annuity of Present e ) a. What is the future of money in your countr y is the future value of the

Answer 1

$ Present Value 10,000 Rate of interest 5.00% Future Value Present Value (1+rate/100)^time Solution a Future Value (2 years) $10000 x 15/100)^2 $10000 x (1.05)^2 $10000 x 1.1025 11,025 Solution b. $10000 x 15/100)^5 $10000 x (1.05)^5 $10000 x 1.276282 Future Value (5 years) = 12,763 Comparison of Business Opportunity and Savings Account Particulars Future Value (2 years) Future Value (5 years) Savings A/c Savings or Buiness Business 11,000 $ 13,000 $ 11,025 Savings 12,763 Business Solution c Second Option 5 years will be the correct answer as it is better to invest in Business than in Savings account for 5 years $9,00,000 Adison Corp, Equipment costs Life of asset 6 years Salvage Value 0 (Cost-Salvage) /life of asset ($900,000 0)/ 6 $1,50,000 Depreciation $ 1,50,000 Annual increase in Cash flow =

In case of any doubt, please comment below