Assignment 1 Fin 220 Compound interest 1. To what amount will the following investments accumulate? a. $5,000 invested for 10 years at 10 percent compounded annually b. $8,000 invested for 7 years at 8 percent compounded annually 2. Nikora Ltd., based in Georgia, produces meat and milk products. The company sold old machinery for 100,000 Georgian Lari (GEL) and decided to put this amount in a term deposit, which usually pays 10 percent annually. A. Calculate the amount of money that Nikora will receive after 2,4, and 7 years of deposit. B. Re-calculate results from part (a) if bank offers 10 percent annual compound interest on semi-annual basis. C. What conclusion can you draw from the calculations you have completed in: B 3. Sales of a new finance book were 15,000 copies this year and were expected to increase by 20 percent per year. A What are expected sales during each of the next 3 years? Graph this sales trend and explain B. 4. Maria wants to buy an apartment in the city center after her graduation in 4 years. An apartment costs $20,000 and the price is expected to increase by 4 percent each year. Maria wants to sell her old house in the suburbs and make a deposit for 8 percent per annum. A. How much will Maria's new apartment cost B. and how much she must she save today