Assume that you are nearing graduation and have applied for a job at a bank. The first section of the test addresses discounted cash flows analysis.
B) 1. What’s the future value of an initial $100 after 3 years if it is invested in an account paying 10% interest?
2. What’s the present value of $100 to be received in 3 years if the appropriate interst rate is 10%?
C) We sometimes need to find out how long it will take a sum of money to grow to some specified amt. For example, if a company’s sales are growing at a rate of 20% per year, how long will it take sales to double?
D) If you want an investment to double in 3 years, what interest rate must it earn?
F) 1) What is the future value of a 3 -years ordinary annuity of $100 if the approciate interst rate is 10%?
2) What is the present value annuity?
3) What would the future and present values be if the annuity were an annuity due?