Problem
1. At what rate of interest will £600 accumulate to £900 in 5 years?
2. Would you prefer (a) £5,000 now or (b) £8,000 in 4 years' time if money can be borrowed or lent at 11%?
3. The following investment projects all involve an outlay now and a single return at some point in the future. Calculate the NPV and say whether or not each is a worthwhile investment:
(a) £1,100 outlay, £1,500 return after 3 years, interest rate 8%
(b) £750 outlay, £1,000 return after 5 years, interest rate 9%
(c) £10,000 outlay, £12,000 return after 3 years, interest rate 8%
(d) £50,000 outlay, £75,000 return after 3 years, interest rate 14%
(e) £50,000 outlay, £100,000 return after 5 years, interest rate 14%
(f) £5,000 outlay, £7,000 return after 3 years, interest rate 6%
(g) £5,000 outlay, £7,750 return after 5 years, interest rate 6%
(h) £5,000 outlay, £8,500 return after 6 years, interest rate 6%
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.