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2. You have $100 and a bank is offering 5% interest on deposits. If you deposit the money in the bank, how much will you have in one year
3. You are an international fish trader. A food producer in the Czech Republic offers to pay you two million Czech koruna today in exchange for a year's supply of frozen fish. Your Thai supplier will provide you with the same supply for three million Thai baht today. If the current competitive market exchange rates are 18.50 koruna per dollar and 26.
For the following questions, assume an annual annuity of $1,000 and a required return of 12%.
a. What is the future value of a ten-year ordinary annuity?
b. If you earned an additional year's worth of interest on this annuity, what would be the future value?
c. What is the future value of a 10-year annuity due?
d. What is the relationship between your answers in parts (b) and (c)? Explain.per dollar, what is the value of this exchange to you?
4. For the following questions, assume an annual annuity of $1,000 and a required return of 12%.
a. What is the future value of a ten-year ordinary annuity?
b. If you earned an additional year's worth of interest on this annuity, what would be the future value?
c. What is the future value of a 10-year annuity due?
d. What is the relationship between your answers in parts (b) and (c)? Explain.
5. Kim Edwards and Hiroshi Suzuki are both newly minted 30-year-old MBAs. Kim plans to invest $1,000 per month into her defined contribution superannuation plan beginning next month. Hiroshi intends to invest $2,000 per month into his super plan, but he does not plan to begin investing until 10 years after Kim begins investing, Both Kim and Hiroshi will retire.at_age. 67 and theicsuper plans average.
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