Reference no: EM132581226

Question 1: You are thinking about starting a pension fund. You plan to deposit 2000 in the fund at the beginning of each year and you expect the average rate of return to be 9% per year for the entire term. Assuming you are now 30 years old, how much money will your account accumulate by the time you are 65? Now assume that you started the pension fund 3 years earlier and have already accumulated 7500 in your account. How much money will your account accumulate at the end of the 35 years.

Question 2: You are presented with an investment opportunity that returns 1000 each year over the next five years. To receive this annuity, you must invest 4000. Are you willing to pay 4000 today to earn 5000 over the next five years? The rate of interest is 4.5%. If you are offered a lump sum of 5000 at the end on the 5 year period instead of each year, would the investment still be attractive?

Question 3: We want to pay off the mortgage in 15 years. The annual rate of interest is 6 percent. The bank has told us we can afford monthly payments of 2000 only. How much can we borrow?

Question 4: Suppose you're a sales representative for a packaging business. You must achieve Rs.1,00,000 in sales this year to receive a bonus. Till date you have sold 2,000 units of a product with a per-unit sales price of Rs.3.46. How many units must you sell to achieve your Rs.1,00,000 goal?