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Q. Degree of uncertainty in predicting cash balances?
Probability approaches identify a degree of uncertainty in predicting cash balances and allow for a range of outcomes to occur. If the assessment of such likelihood is accurate then cash resources can be put in place in readiness for the predicted events. The method isn't wholly reliable in situations where the number of potential outcomes is small since unfeasible expected outcomes may be predicted by using a probability approach.
(a).At the end of three years, how much is an initial deposit of $100 worth, assuming a compound annual interest rate of (i) 100 percent? (ii) 10 percent? (iii) 0 percent? (b).b. A
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