A business person invests M10, 000. During the first year the investment  earned 20% for the year. During the second year, she earned only 4% for  that year. 

How much is her original deposit worth at the end of the two years?  

  

b) How much do you have to deposit today in a bank account paying interest  compounded quarterly:  

I. If you wish to have M15,000 at the end of 3 months, if the bank pays 5.0%  APR? 

II. If you wish to have M50,000 at the end of 24months, if the bank pays 8.0%  APR? 

III. If you wish to have M6,000 at the end of 12 months, if the bank pays 9.0%  APR? 

c) What rate of interest [APR] is the bank charging you if you borrow M77, 650 and have to repay M80, 000 at the end of 2 quarters, if interest is  compounded quarterly? 

d) Suppose you make an investment of M1,000. This first year the investment  returns 12%, the second year it returns 6%, and the third year in returns 8%.  

How much would this investment be worth, assuming no withdrawals are  made? 

Answer rating: 100% (QA)

Answer Sub heading Calculation of Investment Value and Deposits a Calculation of Investment Value To calculate the value of the investment at the end of two years we can use the following formula Inve... View the full answer