<blockquote id="quote" class="ffs">quote:Originally posted by poet123

Below are the questions which require answers!!

If S saves £20 per year for 20 years how much will herhave saved at the end of 20 years? Use an interest rate of 2% (hint work out the present value of the annuity then calculate its futir value by multyplying by (1+i )20)The 20 is written as to the power 20 in small figures at the top of the bracket.


Texas superstore once made he following offer;
"Buy one of our kitchens and we will give you your money back after.... 8 years"
If Texas can invest money at 5% what is the equivalent discount for this strange offer? ie this offer is the same as a discount of x% of the current purchase price (hint identify the cash flow- as ever)


A car dealer offers to sell you their cars at half price as long as you sell the car back to them for £1 after 5 years and agree to have the car serviced with them. T ypically in todays prices a £10,000 car would be worth £2,500 after 5 years. Servicing costs would produce profit of about £200 per year again at todays prices. Asuming an inteest rate of %6 what is he eqivalent selling price of a car with no such conditions? Are there any other problems with this offer for the car dealer?

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My brain is hurting already!