Assume that you want to deposit an amount (BD120,000.00) into an account three years from now in order to be able to withdraw BD750 per year for ten years starting four years from now. Assume that the interest rate is 4.5% per year. Construct the cash flow diagram. Suppose that you want to make a deposit into your account now such that you can withdraw an equal amount (A1) of BD300 per year for the first five years starting one year after your deposit and a different annual amount (A2) of BD600 per year for the following three years. With an interest rate (i) of 5.5% per year, construct the cash flow diagram. If you deposit BD1,500 now, BD3,600 three years, BD2000 seven years, and BD1,800 nine years from now in a savings account that pays 10% interest, how much would you have at the end of year 25? Construct the cash flow diagram.
Assume that you want to deposit an amount (BD120,000.00) into an account three years from now in order to be able to withdraw BD750 per year for ten years starting four years from now. Assume that the interest rate is 4.5% per year. Construct the cash flow diagram. Suppose that you want to make a deposit into your account now such that you can withdraw an equal amount (A1) of BD300 per year for the first five years starting one year after your deposit and a different annual amount (A2) of BD600 per year for the following three years. With an interest rate (i) of 5.5% per year, construct the cash flow diagram. If you deposit BD1,500 now, BD3,600 three years, BD2000 seven years, and BD1,800 nine years from now in a savings account that pays 10% interest, how much would you have at the end of year 25? Construct the cash flow diagram.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:QI. KNOWLEDGE AND UNDERSTANDING
DRAWING CASH FLOW DIAGRAM
Draw the
ww m mm
cash flow diagram for the following :
1. Assume that you want to deposit an amount (BD120,000.00) into an account three
years from now in order to be able to withdraw BD750 per year for ten years
starting four years from now. Assume that the interest rate is 4.5% per year.
Construct the cash flow diagram.
2. Suppose that you want to make a deposit into your account now such that you can
withdraw an equal amount (A1) of BD300 per year for the first five years starting
one year after your deposit and a different annual amount (A2) of BD600 per year
for the following three years. With an interest rate (i) of 5.5% per year, construct the
cash flow diagram.
3. If you deposit BD1,500 now, BD3,600 three years, BD2000 seven years, and
BD1,800 nine years from now in a savings account that pays 10% interest, how
much would you have at the end of year 25? Construct the cash flow diagram.
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