Question

Chapter 5 Homeworlk Suppose the government decides to issue a new savings bond that is guaranteed to double in value if you hold it for 16 years. Assume you purchase a bond that costs $25. a. What is the exact rate of return you would earn if you held the bond for 16 years until 10 points it doubled in value? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If you purchased the bond for $25 in 2017 at the then current interest rate of 11 per 0 year, how much would the bond be worth in 2025? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Print c. In 2025, instead of cashing in the bond for its then current value, you decide to hold the bond until it doubles in face value in 2033. What annual rate of return will you earn over the last 8 years? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) References a. Rate of return b. Value of bond c. Rate of return

Answer 1

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PV, FV, ANNUITY (Autosa File Home Insert Page Layout Formulas Data Review View Add-Ins - Cut AutoSum General A A Wrap Text Calibri 11 Fill Copy A Merge & Center Conditional Format Paste S % Cell Insert Delete Format Sort & Find & BIU Format Painter Clear ble Styles er Select Formatting Font Clipboard Alignment Number Shules Cells Editing QA183 QG PZ OA OB QC QD QE QF QH QJ OK 171 172 173 NEW SAVINGS BOND 174 175 PV 25 a 176 EV 50 177 YEARS 16 4.43% EXCEL-RATE(QE176 ,, -QE174, QE175) RATE OF RETURN 178 179 180 PV 25 181 YEARS 182 RATE 0.11% 25.22 EXCEL FV(QE181,QE180,,-QE179) 183 EV 184 185 PV 25.22 C 186 FV 50.00 187 YEARS 188 RATE OF RETURN 8.93% EXCEL -RATE (QE186,,-QE184,QE185) 189 Hpv, fv, annuityCAP STRU VALUE LOCK BOX DILUTION DOLLAR COST AVG MORTGAGE EXPO NPER APR CPI ear FVA pva Sheet3 14 profit marginsymbos Sheet2 130% O) Re erences: X262 15:15 ENG 8-06-2019