1) You have found an investment paying 12% compounded annually. You invest $1,000 today, add $500 at the end of Y2, and $1,000 at the end of Y4.
a) How much money will you have at the end of 4 years?
b) Create a timeline that reflects the CASH FLOWS in the problem.
2) A friend agrees to lend you $17,500 to start a business on the condition that you agree to repay him $25,000 in 4 years. what is the implied annual interest rate on this loan?
3) Basic bank pays 4% simple interest on deposits and compound bank pays 4% compounded montly. If you deposit $10,000 in each bank how much interest will you have earned at each bank at the end of five years?