A Php20,000 bond is sold now for Php18,500. Determine the redemption price at the end of seven years, if the yield is 12% semi-annually and the rate is 10% payable every six months.
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- Consider a 15-year, 6% annual coupon bond with $1,000 par value. If the current YTM of the bondis 6%, what is its effective duration equal to?Mr. Ceballos purchased a statue for Php 2,500. Ten years later, he sold this statue for Php 7,500. If the statue is viewed as an investment, what annual rate did he earn?On July 1, 2012, Ms. C will need Php1, 000. Assume that the annual effective interest rate equals 0.0625. How much would Ms. C have to deposit on October 1, 2008 in order to be able to withdraw the Php1, 000 from the account on July 1, 2012?
- How many months will it take for PHP 580,000 to amount to PHP 800,000, at a discount interest rate of 5.5%?A businessman is faced with the prospect of fluctuating future budget for the maintenance of the generator. During the first 5 years, P1,000 per year will be budgeted. During the second five years, the annual budget will be P1,500 per year. In addition, P3,500 will be budgeted for an overhaul of the machine at the end of the fourth year and another P3,500 for an overhaul at the end of 8th year. Assuming compound interest at 6% per annum, what is the equivalent annual cost of maintenance?The municipality of Smallville has arranged to borrow Php30 million in order to implement several public projects (flood control, school security, etc.) The interest rate will be 3% per year, payable at the end of each year. This Php30 million debt will be retired by making principal payment of Php5 million at the end of each year. The board of Supervisor is concerned that it will take too long to pay off this debt. How many years will it take to retire this Php30million debt and its associated interest payments in years?
- A student plans to deposit P1,500 in the bank now and another P3,000 for the next two years. If he plans to withdraw P5,000 three years from after his last deposit for the purpose of buying shoes, what will be the amount of money left in the bank after one year of his withdrawal? The effective annual rate of interest is 10%.Payments of $1750 and $1600 are due four months from now and nine months from now respectively. What single payment is required to pay off the two scheduled payments today if interest is 9% and the focal date is today?An endowment of $1,000,000M has been setup to fund ten engineering scholarships every year in a state university in Tennessee. If the endowment is expected an earn 9% rate of return, the amount of scholarship that can be given from year 2 is $9,000. True / False
- You are planning for retirement 34 years from now. You plan to invest $4,200 per year for the first 7 years, $6,900 per year for the next 11 years, and $14,500 per year for the following 16 years (assume all cash flows occur at the end of each year). If you believe you will earn an effective annual rate of return of 9.7%, what will your retirement investment be worth 34 years from now?In order to cut the cost of electricity consumption in a certain establishment, a solar-powered system was installed to supply the whole building’s demand. If the monthly electricity bill is Php12,500 when connected to MERALCO and the cost of a solar-powered system is Php370,000 with annual maintenance of Php3,000 increasing Php200 yearly, determine the number of years in order to pay back the cost of the equipment installed. Let the annual worth of the money be 20%. (Hint: Cash outflow for MERALCO Connection = Cash outflow for Solar Powered System Connection)A contractor wish to buy a machine worth P1, 000,000 after one year. If the bank gives an investment of 1.5% monthly. What amount must be deposited at the bank at every beginning of the month in order to have P1, 000,000 after one year?