Question

2pt per question. Show your work clearly to eam partial credit! Read the questions carefully! Suppose you invest $100, $200, & $300 at the end of year 1 to 3 in the next 3 years and earn 6% each year. What is the future value at the end of year 3? tcompute the PV: using CF function: CO0-0, CO1- 100, C02=200 , C03-300, I-6, CPT NPV= FV,=PV (1r)624.36 Suppose you expect your investment to earn 6 % in the first year but decline to 3% in the second year. You want $5,000 after 2 years, what is the amount you need to invest today (present value)? 2. FV=PV (+)-5000-PV, 1+03)-PV, 4854.369 FV,=PV (1+)-4854.369= PV, ( 1+06)-PV4579.59 Alternatively, you can use your calculator To compute PV, N=1, FV -5000, I-3, PMT 0; CPT PV 4854.369 To compute PV, N-1, FV - 4854.369, I-6, PMT 0; CPT PV =4579.59 Janes, started out from a balance of 0, invested $100 each year in the past 10 years and her balance is $1440 today, what 3. is her effective annual interest rate? N-10; PV-0; FV= 1440; PMT 7.87 % -100; CPTI

please answer all

Answer 1

1.

year (n)	cash flow	discounting factor = (1+r)^(N-n) here N= 3	DF	Future value = Cash flow * discounting factor
1	100	(1+0.06)^(3-1)	1.12	112.36
2	200	(1+0.06)^(3-2)	1.06	212.00
3	300	(1+0.06)^(3-3)	1.00	300.00
		Total		624.36

the value invested at the 1st year is for 2 years , so 2 years future value ,

value invested at the end of 2nd is invested for 1 year and value ta the end of 3rd is for no time .

the future value = $624.36