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How much will you have at the end of the years

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Question - You are saving up to start a new business venture and will need to accumulate $20,000. You figure you will have to work in your current job for three more years to save enough money and get more experience. You have $5,000 you can deposit now. Additionally, you will be able to deposit $3,000 at the end of each year for the next three years. ALL deposits earn 4% interest with quarterly compounding. I suggest using a time line to help with the periods. Show your work to receive partial credit.

Required -

a. How much will you have at the end of the 3 years?

b. If you did part a correctly, you will find out you do not have enough money to start your company. There are at least 4 things you can do to get you can do to get you closer to this goal. (Identify and Explain the concepts behind three of them)

c. You will be receiving a payment of $5,000 in three years. You feel an 8% required rate of return is appropriate. What is the value of this investment today?

d. Assume your required rate of return rose from 8% in Part C to 10% due to inflation fears. How would your answer? This is a theory answer only.

Reference no: EM132731336

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