An investment offers the cash flows

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Reference no: EM131014102

Part 1: An investment offers the following cash flows: $650 today, $750 one year from now, $900 in 2 years, and $850 in 3 years. If the relevant interest rate is 4% per year (an APR, with interest compounded annually), what is the value of the investment 3 years from today (immediately after the cash flow at "year 3" occurs)?

Part 2. You are taking out a car loan and will make payments of $350 each month (beginning one month from today), for a total of 60 monthly payments. If the interest rate on the loan is 1.20% (the effective monthly rate on this loan), how much are you borrowing to buy the car?

Part 3. You will deposit $550 each year into an investment account that earns 9% interest (an APR, with interest compounded annually). Your first deposit will be exactly one year from today, and you'll make a total of 10 deposits. How much will be in your account 10 years from today?

Reference no: EM131014102

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