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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Growth rates You are given the series of cash flows shown in the following table.
|
Year |
Cash flows |
||
|
 |
A |
B |
C |
|
1 |
$500 |
$1,500 |
$2,500 |
|
2 |
560 |
1,550 |
2,600 |
|
3 |
640 |
1,610 |
2,650 |
|
4 |
720 |
1,680 |
2,650 |
|
5 |
800 |
1,760 |
2,800 |
|
6 |
 |
1,850 |
2,850 |
|
7 |
 |
1,950 |
2,900 |
|
8 |
 |
2,060 |
 |
|
9 |
 |
2,170 |
 |
|
10 |
 |
2,280 |
 |
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a. Calculate the compound annual growth rate associated with each cash flow stream.
b. If year-1 values represent initial deposits in a savings account paying annual interest, what is the annual rate of interest earned on each account?
c. Compare and discuss the growth rate and interest rate found in parts a and b, respectively.
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