Test addresses discounted cash flows analysis

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Assume that you are nearing graduation and have applied for a job at a bank. The first section of the test addresses discounted cash flows analysis.

B) 1. What’s the future value of an initial $100 after 3 years if it is invested in an account paying 10% interest?

2. What’s the present value of $100 to be received in 3 years if the appropriate interst rate is 10%?

C) We sometimes need to find out how long it will take a sum of money to grow to some specified amt. For example, if a company’s sales are growing at a rate of 20% per year, how long will it take sales to double?

D) If you want an investment to double in 3 years, what interest rate must it earn?

F) 1) What is the future value of a 3 -years ordinary annuity of $100 if the approciate interst rate is 10%?

2) What is the present value annuity?

3) What would the future and present values be if the annuity were an annuity due?

Reference no: EM13874915

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