(12-3) The following equation (AFN) is sometimes used to forecast financial requirement. What key assumption do we make when using this equation?

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(12-3) The following equation (AFN) is sometimes used to forecast financial requirement.

 

What key assumption do we make when using this equation?

 

Under what conditions might this assumption not hold true?

 

(12-5)What is meant by the term “self-supporting growth rate?”

 

How is the rate related to the AFN equation, and how can that equation be used to calculate the self-supporting growth rate?

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It is a Masters level class therefore need to be perfectly done. This accounts for 70% of my overall grade on class.

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I have a Project in International Finance. It involves currency exchange etc.

 

It is a Masters level class therefore need to be perfectly done. This accounts for 70% of my overall grade on class.

 

Please go through assignment details given in attached PDF file.

 

I want it by 27th Dec, 2013.

 

It is word limit 3,000

 

Please check it very very very carefully and contact only if you are 100% sure to do it perfectly. Once you are ready then I will provide you with dates and currencies that would be used to do the assignment.

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. You wish to deposit $500 per month into an account for 36 months. Assume your interest rate is equal to the prime interest rate.

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Note: All interest rates are to be assumed to be yearly interest rates.

 

Question 1

(10 points)

1. You wish to deposit $500 per month into an account for 36 months. Assume your interest rate is equal to the prime interest rate.

 

a) How much do you have (total) in the account after 36 months?

 

b) How much of that total is interest?

 

Question 2

(10 points)

2. Two people, Ella and Jane, decide to start saving for retirement. Ella decides to invest $4000 a year into an annuity at the age of 25. At the age of 35 she stops making investments and just leaves the money there. Jane on the other hand, decides to start investing $4000 a year at the age of 40 and invests that money for every year thereafter. Assuming both retire at 70, and that the interest rate both get on their investments is 10% (compounded annually) who has the most money in their account at age 70? Explain why you pick the answer you pick.

 

Question 3

(10 points)

3. At the age of 30 you decide to start saving money. At first you can only afford to deposit $200 per month. However, at the age of 38 you are able to deposit $300 per month. Then at the age of 45 you raise your monthly deposit again to $500 per month. Finally at the age of 50 you get promoted to president of the company and are able to deposit $2000 per month into the account. Assuming your account is earning (prime interest rate + 4%) in interest, compounded monthly, how much do you have in your account at the age of 70? Hint: Treat each time that you change the deposit amount as a seperate annuity, and compute the future value (FV) on each annuity seperately. Assume that each annuity earns compound interest during the time it is not receiving deposits.

 

Essay

(15 points)

4. It is commonly assumed that the stock market yields a 10% rate or return (on average) on investments made in the market long term. Write an essay looking at the advantages and disadvantages of investing in the stock market long term.

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What is the capital market? How is the promary market different from the secondary market? In your opinion, are these markets effecient? Why or Why not?

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What is the capital market? How is the promary market different from the secondary market? In your opinion, are these markets effecient? Why or Why not?

The post What is the capital market? How is the promary market different from the secondary market? In your opinion, are these markets effecient? Why or Why not? appeared first on Infinitessays.org.