FINANCE
Assignment_4

# Assignment_4 - FIN254 Assignment#4(Based on Chapter 6...

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FIN254: Assignment#4 (Based on Chapter 6) FIN254: Assignment#4 (Based on Chapter 6) 1. Suppose Mr. Raju wants to be a millionaire in 30 years. How much does he have to save each month if he can earn 12% annual return? How much does he have to save each month if he starts saving ten years from now? Twenty years from now? 2. Suppose, Mercantile bank is offering you to quadruple your money in twenty months. What rate of return are you being offered per quarter? 3. You always purchase lottery tickets thinking ‘JODI LAIGGA JAY’. Finally one day, you won a lottery. You will receive \$500,000 in one year. You will then receive payments for 30 years, which will increase 5% per year. If the required rate is 10%, what is the present value of your winnings? 4. One day you woke up from sleep and thought “Hmm, wish I could have \$30,000 with me! I could do so much shopping!” Then you thought you could make monthly payments of \$300 starting from the end of this month into an account that pays 12% interest compounded monthly. Then you found out the number of payments would be

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• Spring '14

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