a. What will be the future value of first plan at the end of 10 years?
FV = 5000 * (1 + (0.065/2) 2*10 -1/0.065/10
FV = 5000 * (1+0.0325) 20 -1/0.0065
FV = 5000 * 0.895838/0.0065
FV = 689,106.1b. What will be the future value of the second plan at the end of 10 years?
FV = 10,000 * (1+0.075) 10 – 1/0.075
FV = 10,000 * (1.075) 10 – 1/0.075
FV = 10,000 * 1.061032/0.075
FV = 141,470
c. You are required to analyze that which plan would be suitable for him while keeping in view his major concern: 'The value of plan at the end of 10th year'.
First Plan is suitable.
d. What would be the change in your decision if the interest rate on second plan is also 6.5 percent?
There will be no change if the interest rate on second plan is also 6.5 percent. Because the future value in first plan is greater than all others.
mgt201 required
On Fri, Nov 11, 2011 at 9:38 AM, mc090404040 Muhammad Mateen <mc090404040@vu.edu.pk> wrote:
need solutions of MGT 201 Assignment 1. Please upload right
> solutionOn 11/10/11, mc110202236 Tariq Maqsood <mc110202236@vu.edu.pk> wrote:> Dear Allz,
>
> I need solutions of MGT 201 Assignment 1. Please upload right
> solution.....................
>
>
> MC110202236
>
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