HIST 1402 Lecture Notes - Lecture 16: Money Market Account, Net Present Value
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A hard copy of your answers must be handed in at the beginning of the class period on monday. Make sure that you write your answers clearly showing the required steps. (21 points) (3 points) 1. You have just received a windfall from an investment you made in a friend s business. He will be paying you ,000 at the end of this year, ,000 at the end of the following year, and ,000 at the end of the year after that (three years from today). The interest rate is 3. 5% per year: what is the present value of your windfall, what is the future value of your windfall in three years (on the date of the last payment)? (3 points) 5. You can invest ,000 in a certificate of deposit (cd) offered by your bank. Cd is for 5 years and the bank quotes you a rate of 4. 5%.
