Question

At the end of each of the next 5 years, you will deposit the following amount into your savings account: Year Cash Flow 1 $200 2 $300 3 $400 4 $200 5 $600 You expect interest rates to be higher in the future. Your best guess of what rates will be in the future is: Rate 1 year from now 10% Rate 2 years from now 11% Rate 3 years from now 12% Rate 4 years from now 13% If you forecast of interest rates is correct, how much money will you have 5 years from now

Answer 1

Answer: At the end of each of the next 5 years, you will deposit the following amount into your savings account: Year Cash Flow 1 $200 2 $300 3 $400 4 $200 5 $600 You expect interest rates to be higher in the future. Your best guess of what rates will be in the future is: Rate 1 year from now 10% Rate 2 years from now 11% Rate 3 years from now 12% Rate 4 years from now 13% If you forecast of interest rates is correct, how much money will you have 5 years from now

Explanation: