Suppose you are to receive the following cashflows in the future, at the times indicated below....
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Suppose you are to receive the following cashflows in the future, at the times indicated below. (a) Assuming that you deposit all cashflows into a savings account that earns interest at a rate of 3.6% nominal, convertible 12 times per annum, what is the accumulated value of your savings in exactly 21 years time? Hint: Use Excel! Time from now (years) Cashflow Time from now (years) Cashflow 0.25 8,154 13 9,506 0.5 10,450 13.25 2,443 2.5 7,432 14 41,377 3 49,534 14.5 5,169 3.75 4,282 15 74,865 4 2,416 15.5 4,253 4.25 55,921 18 2.400 11 5,665 19.5 21,767 12.75 59,203 19.75 6,715 (b) Repcat part (a), but with the following interest / earning rates applying: i) = 7.3% [ii] 0 5) = 7.3% [ii] = 7.3% [iv] d = 7.6% (e) What does the interest / earning rate have to be, in order for the accumulated value in 21 years' time to be equal to $1 million? Give your answer in terms of i, the annual effective rate of interest, to 3 significant figures. (d) What does the interest / carning rate have to be, in order for the accumulated value in 21 years' time to be equal to $350,000? Give your answer in terms of i, the annual effective rate of interest, to 3 significant figures. Suppose you are to receive the following cashflows in the future, at the times indicated below. (a) Assuming that you deposit all cashflows into a savings account that earns interest at a rate of 3.6% nominal, convertible 12 times per annum, what is the accumulated value of your savings in exactly 21 years time? Hint: Use Excel! Time from now (years) Cashflow Time from now (years) Cashflow 0.25 8,154 13 9,506 0.5 10,450 13.25 2,443 2.5 7,432 14 41,377 3 49,534 14.5 5,169 3.75 4,282 15 74,865 4 2,416 15.5 4,253 4.25 55,921 18 2.400 11 5,665 19.5 21,767 12.75 59,203 19.75 6,715 (b) Repcat part (a), but with the following interest / earning rates applying: i) = 7.3% [ii] 0 5) = 7.3% [ii] = 7.3% [iv] d = 7.6% (e) What does the interest / earning rate have to be, in order for the accumulated value in 21 years' time to be equal to $1 million? Give your answer in terms of i, the annual effective rate of interest, to 3 significant figures. (d) What does the interest / carning rate have to be, in order for the accumulated value in 21 years' time to be equal to $350,000? Give your answer in terms of i, the annual effective rate of interest, to 3 significant figures.
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