Question 1 at what rate of interest will pound600, Ask an Expert

Economics

Question: 1. At what rate of interest will £600 accumulate to £900 in 5 years?

2. Would you prefer (a) £5,000 now or (b) £8,000 in 4 years' time if money can be borrowed or lent at 11%?

3. The following investment projects all involve an outlay now and a single return at some point in the future. Calculate the NPV and say whether or not each is a worthwhile investment:

(a) £1,100 outlay, £1,500 return after 3 years, interest rate 8%

(b) £750 outlay, £1,000 return after 5 years, interest rate 9%

(d) £50,000 outlay, £75,000 return after 3 years, interest rate 14%

(e) £50,000 outlay, £100,000 return after 5 years, interest rate 14%

(f) £5,000 outlay, £7,000 return after 3 years, interest rate 6%

(g) £5,000 outlay, £7,750 return after 5 years, interest rate 6%

(h) £5,000 outlay, £8,500 return after 6 years, interest rate 6%

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M92290798

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