3. Calculate the present value (PV) for the following mixed stream of cash flows if the required discount rate is 10% p.a.
Year Cash flow
1 200
2 400
3 600
4 800
5 400
6 800
a) R3095.77 b) 2430.30 c) 2030.50 d) 2209.54 e) none of the above
4. X can set aside R1000 today to purchase a travel ticket to the USA. If the annual interest rate is 18% per annum compounded monthly, how much can X spend on the ticket four years from now. (round off to the nearest R1).
a) 2370 b)2043 c) 1939 d) 1392 e) none of the above
5. An inflation rate of 8.7% per year is estimated for the next 10 years. Calculate how long it wwill take for prices to double (round off to two decimal places)
a) 8.31 years b) 10 c) 8 d) 9.25 e) none of the above
6. You invest R2400 annually (at the end of each year) for successive years in a savings account at 15% p.a. (interest is compounded per year). At the end of the fifth year you withdraw R6181.72 and the balance is invested at 10% p.a. for 5 years. What will be the end value of the investment (round off to the nearest Rand).
a) 10000 b) 13484 c) 43103 d) 16105 e) none of the above
Attachment:- 400065_1_123.docx