2. An 8 percent semiannual coupon bond is priced at $1,204.60. The bond has a $1,000 face value and a yield to maturity of 4.88 percent. How many years will it be until this bond matures?…
9. Ferris, Inc., has borrowed from their bank at a rate of 8 percent and will repay the loan with interest over the next five years. Their scheduled payments, starting at the end of the year are as follows—$450,000, $560,000, $750,000, $875,000, and $1,000,000. What is the present value of these payments? (Round to the nearest dollar.)…
b. If you inherited $100,000 today and invested all of it in a security that paid an 8% rate of return, how much would you have in 15 years?…
3. Assume that 11% is the market rate of interest in on January 1, 1975. Compute the present value at January 1, 1975 of all payments that will be made on the 5% bonds if they are not retired.…
Bonds-3. A certain bond pays a semiannual coupon rate at a 10% annual rate. The bond has a par value of $1,000. There are eight years to maturity. The yield to maturity is 9%. What is the current price of the bond?…
16. $3000 annual contribution to a retirement account earning 6% will be worth___________ in 20 years.…
3. (FV of annuity due) To finance your newborn daughter’s education you deposit $1,200 a year at the beginning of each of the next 18 years in an account paying 8% annual interest. How much will be in the account at the end of the 18th year?…
4. The Peace and Development Club raised $5000 for a trip to Guatemala in the future. The club invested part of the money in an account that paid 4% simple interest, and the rest in a government bond that paid 3.5% simple interest per year. After one year, the club earned a total of $190 in interest. How much was invested at each rate?…
2. What is the total present value of the following cash stream, discounted at 8 percent? (5 points)…
a. Find the equivalent present values of the two projects. b. Find the equivalent values of the two projects at the end of 10 periods. c. Find the equivalent uniform series of the two projects. 3. Assuming an (effective) interest rate of 10% per annum: a. How much must be invested today in order to provide an annuity of $20,000 per year for 4 years, with the first payment occurring exactly 10 years from now. b. How much must be invested today in order to provide an annuity of $10,000 every 6 months for 4 years (8 payments) with the first payment occurring exactly 10 years from now? c. A sum of $2,000 will be deposited into a savings account at the beginning of each year for 10 years. If the fund accrues interest at the rate of 10% per year, how much will be in the fund after 10 years? 4. How many months will it take to pay off a $525 debt, with monthly payments of $15 at the end of each month, if the interest is at the (nominal) annual rate of 18% compounded monthly? 5. You are offered the opportunity to invest $100 for 4 years with simple interest computed at the rate of 10% per year. a. How much (principal plus accrued interest) will you receive at the end of 4 years? b. What is your actual rate of return (per year) on this proposed investment? c. If you invested the $100 elsewhere at a nominal rate of 10% per…
2.) On January 1, 2010, Haley co. issued ten-year bonds with a face amount of $2,000,000 and a stated interest rate of 8% payable annually on January 1. The bonds were priced to yield 10%. What was the total price of the bonds?…
2)Calculate the amount of your simple interest investment after 10 years. Remember to use the same rate and compounding as in #1.…
4. You have an investment of $10,000 in a term deposit account where interest is paid annually at 5% per annum, compounding annually. What will be the nominal value of this investment after two years? 11025…
1. Torvald's Hardware paid a contractor $45,000 to expand the store. The investment increased annual cash inflows by $8,000 per year six years. Torvald's has a desired rate of return of 10%. The net present value of this investment is which of the following? (round to the nearest dollar)…
(10 points) Don has just received a cash gift of $70,000 from his rich eccentric uncle. He wants to set it aside to pay for his daughter Cynthia's college education. Cynthia will begin college in 10 years and Don's financial advisor says that she can earn 8% interest on an investment in a special college fund. How much will Don have in the fund when Cynthia begins college? (Enter just the number in dollars without the $ sign or a comma and round off decimals.)…