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1 Kristina started setting aside funds 8 years ago to save for a down payment on a house
1 Kristina started setting aside funds 8 years ago to save for a down payment on a house. she has saved $900 each quarter and earned an average rate of return of 4.4 annual percent. How much money does she currently have saved for her down payment
2
The particular strategy of trying to offset stable inflows of cash from one country with outflows of cash in the same currency is known? as:
a. balancing.
b. matching.
c. diversification.
d. hedging.
Expert Solution
1
A = P × [ (1 + i)n - 1) / i ]
A = Total Amount
P = Principal amount
i = rate of return
n = number of periods
The given question is of quarterly so
P =$900
i = 4.4%/ 4 = 1.1%
n = 8 × 4 = 32
A = 900 × [ (1 + 1.1%)32 - 1) / 1.1% ]
= 900 × [ ( 1.41917835545 - 1)/1.1%]
= 900 × [ 0.41917835545/1.1%]
=900 × 38.1071232227
= 34,296.4109004
=$ 34,296.41(rounded to 2 decimals)
Kristina currently have for her down payment is $ 34,296.41.
2
This strategy is of offestting stable inflows of cash from one country with outflows of cash in same currency is called as matching.
This is called as matching.
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