### HI5002 Finance for Business – If you invest $7000 now, and your investment pays

Question 1. If you invest $7000 now, and your investment pays 12% per annum. Required: a. In term of time value of money, what does the amount of $7000 represent? b. What is the interest rate 12% called? c. How much will you have in three years if the rate is compounded annually (to the nearest dollar)? d. How much will you have in three years if the rate is compounded semiannually, quarterly, monthly and daily (to the nearest dollar)? Question 2. You have been told that you need $25 500 today in order to have $100 000 when you retire 35 years from now. Required: a. What rate of interest was used in the present value computation if assuming interest…

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