Question : Question the question 3.14


This the question 3.14

The topic is single payment

What wis the ani- per share, The was SIS the tai ss in s years at 7 comi July 2014, and eam wounded annually swa 8 billion. firm's in What is the las SI20oo in year al s su comu growth rate over of real that could be worth siooooo in 10 years (by If Mr. Buffett's cor the historical growth age of 100 Buffett would you be willing to pay for the property future 3.12 What is the present worth of these in 2014) 'a' .00 eight years from now at 12 con Uneven Payment Se 3.18 the follo thi SSN 000 twelve years from now at 4 i com and withdrawals over a earn 10 interest on yo S2sooonine years from now at6s compounded you able to withdraw at sus years from now at9s compounded 1.13 an inserest rate of 13s compounded annu- (a) How much can be lent now if S12.000 will be repaid at the end of four years? fb) How much will be required in five years to repay Figure P3.18 3.14 How many years will it take an investment to interest is 8s compounded 319 You you desire to wi bought 300 shares of General Electric Tabie P3.19 over the ne GE) stock at $7.800 on January 2, 2015. Your inten- account that earns 7% in tion is to keep the stock until it doubles in value. how much do you need If you expect annual growth for GE stock, how many years you anticipate holding onto the stock? Compare your answer with the solution by the Rule of 72 (discussed in Example 3.10). TABLE P 3.16 On October 1, 1970, Walmart first offered 300,000 shares of its common stock to the public at a price of S16.50 per share. Since that Walmart time, has had 11 two-for-one stock splits. So if you pur- chased 100 shares in 1970, you would have 204.800 shares as of September 30, 2014. The closing price

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