### ACG 23 BUSINESS FINANCE – Financial Management

Question 1 (Total marks for this question = 10 marks) Suppose $1,000 is invested each year for 5 years at an interest rate of 10% per annum compounded. Calculate the future value of the investment if the payments are invested at the end of each year and the compounding is annual compounding. (2 marks) Calculate the future value of the investment if the payments are invested at the beginning of each year and the compounding is annual compounding. (2 marks) Calculate the future value of the investment if the payments are invested at the end of each year and the compounding is monthly compounding. (2 marks) Explain what is meant by continuous compounding. (2 marks) Calculate the future value of the…

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