Please show cash flow diagram and steps a) Today you deposited $1,000 in a savings account...

Please show cash flow diagram and steps

a) Today you deposited $1,000 in a savings account paying 5% annual interest. How much should you have at the end of three years?

b) You are paying into a mutual fund that earns 6%. If the payments are $10,000 per year, how much will be in the funds in 15 years?

c) Your company is required to pay into a sinking fund each year in order to replace an industrial equipment costing $100,000 at the end of 10 years from now. The sinking fund is expected to earn 6% interest. How much must your company deposit each year to meet these needs?

d) You borrow $10,000 agreeing to pay the balance in 10 equal annual installments at an interest rate of 8%. What should the payments be?

e) You are interested in replacing an industrial equipment to save labor cost. Labor savings are expected to be $30,000 per year over 10 years. The equipment costs $180,000. Should you buy this equipment if your interest rate is 12%?

Expert Solution

Rahul Sunny answered 2 years ago

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