QUESTION 1 Investment X yields a payment of $5000 at the end of year 1, a paymen

Question

QUESTION 1 Investment X yields a payment of $5000 at the end of year 1, a payment of $7000 at the end of year 2, a payment of $11000 at the end of year 1, a payment of $9000 at the end of year 2, a payment of $7000 at the end of year 3, and a payment of $5000 at the end of year 4. What is the present value of Investment X if the interest eei xpress your answersisct numerical terms. For example,i the answer is $5o0, wrte enter 500 as an answer." QUESTION 2 " Investment X yields a payment of $5000 at the end of year 1, a payment of $7000 at the end of year 2, a payment of $11000 at the end of year 1, a payment of $9000 at the end of year 2, a payment of $7000 at the end of year 3, and a payment of $5000 at the end of year 4. What is the present value of Investment Y if the interest rate is 1 1 %?Note: Express your answers in strictly numerical terms. For example, if the answer is $500, write enter 500 as an answer." QUESTION 3 "Suppose you invest $11000 into a mutual fund that is expected to earn a rate of return of 6%. How money will you have in 10 years? .Note: Express your answers in strictly numerical terms. For example, if the answer is $500, write enter 500 as an answer."

Explanation / Answer

Year Investment X Investment Y PV @ 11% Present Value X Present Value Y 1 $5,000.00 $11,000.00 0.9009 $4,504.50 $9,909.91 2 $7,000.00 $9,000.00 0.8116 $5,681.36 $7,304.60 3 $9,000.00 $7,000.00 0.7312 $6,580.72 $5,118.34 4 $11,000.00 $5,000.00 0.6587 $7,246.04 $3,293.65 Present Value $24,012.62 $25,626.51 1) 2) 3) Future Value = $11000 x (1+ 6%)^10 $19,699.32

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