FFN20303: How much would you have had to invest 21 years ago (t) in an account paying 6%(r) compounded: Money And Capital Market Assignment, MSU, Malaysia

University Management & Science University (MSU)
Subject FFN20303 Money and Capital Market Assignment
  1. How much would you have had to invest 21 years ago (t) in an account paying 6%(r) compounded annually to cover the cost of a $15,000 (FV) engagement ring for your fiancé?

 

  1. Approximately how many years must one wait for an initial investment of $10,000 to triple in value if the investment earns 9% compounded annually?

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  1. During one year on a $250 deposit paying continuously compounded interest at an APR of 8%, how much interest can be accumulated?

Interest = principal ´ rate ´ term (n)

 

  1. If your trust fund promises to pay you $25,000 on your 24th birthday (6years from today) and earns 9% compounded annually, then what is the trust fund’s present value?
  2. If a $10,000 investment will return $25,000 to you in five years, then to the nearest percent what annual interest rate is being offered?

FV    =    PV     (1 + r)t

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