(TOTAL: 25 MARKS) Question 4 a) If today is year 0, what is the future value of the following cash flows 10 years from now? Assume an interest rate of 7.8 percent per year. Year Cash Flow 2 RM8.500 3 RM9,300 6 RM7.100 (6 marks) b) You deposit RM1,000 in a retirement account today at 8 percent interest. How much more money will you have if you leave the money invested for 40 years rather than 35 years? (6 marks) Continued... c) You have decided to endow your favorite university with scholarship. It is expected to cost RM6,000 per year to attend the university into perpetuity. You expect to give the university the endowment in 10 years and will accumulate it by making equal BFN1024 PRINCIPLES OF FINANCE 3RD MARCH 2020 annual (end of year) deposits into account. The rate of interest is expected to be 10% for all future time periods. How large must be the endowment be? (5 marks) d) You will receive annual payments of RM2,400 at the end of each year for 15 years. The first payment will be received in year 6. What is the present value of these payments if the discount rate is 7 percent? (8 marks) (TOTAL: 25 MARKS)