Examinable questions and answers on business.

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What is the present value of R100 to be received in 3 years if the appropriate interest rate is 10 percent? R75.13 2. A bank customer wishes to have an amount of R300 000 at the end of 10 years. The... bank pays an interest rate of 8% per annum, compounded annually. How much money will the customer have to invest with the bank now? R138958.05 3. The same customer is offered by a different bank an interest rate of 6.5% per annum, compounded annually. How much money will the customer have to invest with this bank now to achieve his goal of R300 000 in 10 years’ time? R159817.81 4. How much should be invested now into an 8% per annum interest-bearing account, compounded yearly, so that an amount of R250 000 will be accumulated in 6 years? R 157542.41 5. The postmaster wants to retire on his 65th birthday with R1 000 000 from an investment he is about to make in his bank on his 45th birthday. If the bank pays an interest rate of 6% per annum, compounded annually, how much must the postmaster invest now?R311804.73 6. You are offered an investment with a quoted annual interest rate of 13% with quarterly compounding of interest. What is your effective annual interest rate? 13.65% 7. You are offered an annuity that will pay R24000 per year for 11 years (the first payment will occur one year from today). If you feel that the appropriate discount rate is 13%, what is the annuity worth to you today? R136,486.59 8. If you deposit R16000 per year for 12 years (each deposit is made at the end of each year) in an account that pays an annual interest rate of 14%, what will your account be worth at the end of 12 years? R436,331.98 [Show More]

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