Step-by-step solution in equation form for all cost analysis sections
Task: What sum of money will be accumulated in 10 years if:
1) $100 is invested at the end of each month at a 15% rate of return compounded annually.
2) The same investment as above for a 3% rate of return compounded monthly. What is the effective rate?
3) $1,000 is invested at the end of the first year, $1,100 is invested at the end of the second year and each succeeding years investment is $100 higher for 10 years at 15% compounded annually.
4) What single investment at time zero would generate the part (a) future worth?
5) What will the present worth of investments in part (c) be if the investments are started at the end of year 5 for 10 years?