Mr_RS
#1
Current expenditures are USD 500k, which will be inflated by 2 % a year from year 2 onwards.
‘’ the first goal is a need, with a 5-year time horizon and a 95 % probabillity of success. Discount rate is 2.3 %.
How do you get USD 2.43 mln here as a required initial investment?
cpk123
#2
500, 510, 520.2, 530.604, 541.21608
discount at 2.3%
to find PV
I got 2485.38 …
Mr_RS
#3
thanks a lot! I got USD 2,429,502 now, close enough:)
Hi, I’m struggling with the three exercises following this one. Any hints? Thanks in advance!
2). 25-year time horizon starting from year 6, discount rate of 6.1%, current expense 500k, inflation 2%. How to get initial requirement of 4978k?
3). 10-year time horizon, to make a payment of 10m, discount rate 4.1%. How to get 6.671m initial capital? I got 6.691m
4). 20-year time horizon, to make a payment of 10m, discount rate 6.8%. Hot to get 2.426m initial capital?