Briefly explain the impact that compounding interest, more often than annually, has on the future value, given an initial investment.
 

2. Professor Dom wishes to set up a permanent scholarship paying $5,000 per annum, at the beginning of each year, for a promising finance student. How much would he need to invest, if interest on this type of investment is 11% compounded monthly?
 

 

3. Finch Ltd. paid a $4.20 dividend last year. If the company's dividends are expected to grow 5%p.a., what is the value of each ordinary share, if the investor's required rate of return is 17%?

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1 Compounding interest more often than annually has a significant impact on the future value of an i... View the full answer