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Assume that you are nearing graduation and have applied for a job with a local...

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Accounting

Assume that you are nearing graduation and have applied for a job with a local bank. As part of the bank's evaluation process, you have been asked to take an examination that covers several financial analysis techniques. The first section of the test addresses discounted cash flow analysis. See how you would do by answering the following questions.

  1. What is the future value of an initial $100 after 3 years if it is invested in an account paying 10% annual interest?
  2. What is the present value of $100 to be received in 3 years if the appropriate interest rate is 10%?
  3. We sometimes need to find out how long it will take a sum of money (or anything else) to grow to some specified amount. For example, if a company's sales are growing at a rate of 20% per year, how long will it take sales to double?
  4. If you want an investment to double in 3 years, what interest rate must it earn?
  5. What is the difference between an ordinary annuity and an annuity due?

Please relevance is key. Address what the question requires.

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