Homework Answers
(a) 5%
5000/(1+.04)^1 + 5000/(1+.04)^2 + 5000/(1+.04)^3 + 5000/(1+.04)^4 +............................+5000/(1+.04)^15 + 100,000/(1+.04)^15
= 55,592 + 100,000 * .555 = 111,092
(b) 5%
5000/(1+.05)^1 + 5000/(1+.05)^2 + 5000/(1+.05)^3 + 5000/(1+.05)^4 +............................+5000/(1+.05)^15 + 100,000/(1+.05)^15
= 51,900 + 100,000*.481 = 100,000
Since at interest of 5% bond price is coming 100,000, therefore option b is correct.
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Click here to view factor tables
3%? (Round factor values to 5 decimal places, e.g.
1.25124 and final answer to 0 decimal places, e.g.
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Amount to Pay
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value of money problems.a. What is the future value of 22 periodic
payments of $7,520 each made at the beginning of each period and
compounded at 8% per period?b. What would you pay for a $500,000
face value bond that matures in 15 years and pays $40,000 a year in
interest (end-of-period payments) if you wanted to earn a yield of
9%.c. Mike Finley wishes to become a millionaire. His money market
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5. (8 points) Calculate the following time
value of money problems.a. What is the future value of 22 periodic
payments of $7,520 each made at the beginning of each period and
compounded at 8% per period?b. What would you pay for a $500,000
face value bond that matures in 15 years and pays $40,000 a year in
interest (end-of-period payments) if you wanted to earn a yield of
9%.c. Mike Finley wishes to become a millionaire. His money market
fund...
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What would you pay for a $160,000 debenture bond that matures in
15 years and pays $8,000 a year in interest if you wanted to earn a
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Click here to view factor tables
3%? (Round factor values to 5 decimal places, e.g.
1.25124 and final answer to 0 decimal places, e.g.
458,581.)
Amount to Pay
$enter a dollar amount to pay rounded to 0 decimal places
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