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Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
The present value of NA to be paid in t years in the future (assuming 5% continuous interest rate) is P (A, t) = Ae^0.05t. How long will it take N500 to appreciate to N10,000?
A. 5.99 years
B. 26.00 years
C. 52.00 years
D. 59.91 years
E. 599.10 years
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Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
A model for calculating the amount required, , to achieve a specified sum at some future point in time, years at a rate of interest r, is given by:
Required:
i) Determine the present value of GH¢7000.00 payable in 4 years.
(7 marks)
ii) Determine the present value of GH¢8000.00 payable in 6 years.
(7 marks)
You are required to discount these future sums using an interest rate of 8%.
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a) Kofy Addo invested GH¢4,000 into his bank account at the beginning of every year for four years. The bank paid interest at 8% compounded annually for the first four years. Thereafter, the interest rate changed to 8.35%, but Kofy Addo did not make any more deposits. At the end of the sixth year, he withdrew GH¢5000.
Required:
i) Calculate the size of the investment at the end of the sixth year, before the withdrawal.
ii) Calculate the size of the investment after the withdrawal in the sixth year.
iii) Calculate the balance in the account after the eighth year.
b) Kofy Addo decided to start saving money for his future. At the end of each month, he deposited GH¢500 into an account at Trust Bank, which earned an interest rate of 9% per annum compounded monthly.
Required:
i) Determine the balance of Kofy Addo’s account after 20 years. (4 marks)
ii) Calculate the amount deposited into the account over the 20-year period. (2 marks)
iii) Calculate how much interest he earned over the 20-year period. (2 marks)
iv) Calculate the effective annual rate of interest. (2 marks)
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b) The main reason why discounted cash flow methods of investment appraisal are considered theoretically superior is that they take into account the time value of money.
Required:
Explain THREE (3) elements that determine the time value of money and why it is important to take them into consideration when appraising investment projects. (6 marks)
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
The present value of NA to be paid in t years in the future (assuming 5% continuous interest rate) is P (A, t) = Ae^0.05t. How long will it take N500 to appreciate to N10,000?
A. 5.99 years
B. 26.00 years
C. 52.00 years
D. 59.91 years
E. 599.10 years
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
A model for calculating the amount required, , to achieve a specified sum at some future point in time, years at a rate of interest r, is given by:
Required:
i) Determine the present value of GH¢7000.00 payable in 4 years.
(7 marks)
ii) Determine the present value of GH¢8000.00 payable in 6 years.
(7 marks)
You are required to discount these future sums using an interest rate of 8%.
Find Related Questions by Tags, levels, etc.
a) Kofy Addo invested GH¢4,000 into his bank account at the beginning of every year for four years. The bank paid interest at 8% compounded annually for the first four years. Thereafter, the interest rate changed to 8.35%, but Kofy Addo did not make any more deposits. At the end of the sixth year, he withdrew GH¢5000.
Required:
i) Calculate the size of the investment at the end of the sixth year, before the withdrawal.
ii) Calculate the size of the investment after the withdrawal in the sixth year.
iii) Calculate the balance in the account after the eighth year.
b) Kofy Addo decided to start saving money for his future. At the end of each month, he deposited GH¢500 into an account at Trust Bank, which earned an interest rate of 9% per annum compounded monthly.
Required:
i) Determine the balance of Kofy Addo’s account after 20 years. (4 marks)
ii) Calculate the amount deposited into the account over the 20-year period. (2 marks)
iii) Calculate how much interest he earned over the 20-year period. (2 marks)
iv) Calculate the effective annual rate of interest. (2 marks)
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b) The main reason why discounted cash flow methods of investment appraisal are considered theoretically superior is that they take into account the time value of money.
Required:
Explain THREE (3) elements that determine the time value of money and why it is important to take them into consideration when appraising investment projects. (6 marks)
Find Related Questions by Tags, levels, etc.
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