Find the present value of $750 to be paid four years from now when the prevailing interest rate is 10 percent, if interest is compounded annually.
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Find the present value of $750 to be paid four years from now when the prevailing interest rate is 10 percent, if interest is compounded annually.
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- find the present value of $175 perpetuity if the interest rate is 6 percent compounded quarterly. payments are at the beginning of the period.Calculate the current yield on a bond that has an annual interest payment of $200 and a resale price of $1,550Calculate the price of a zero-coupon bond that matures in 20 years if the market interest rate is 3.8 percent. Assume semiannual compounding. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
- Now that young King Solomon has inherited the kingdom of Israel, and a massive amount of wealth that he can invest, he wants to plan for his "retirement." Since he doesn't know how long he'll live, and data on life expectancy is scarce, he reasons that he just wants a regular "cash flow" over the course of his life. With that in mind, how many shekels would he need to deposit at 20 percent interest compounded every year in order to be able to withdraw 50 shekels at the end of every year for seventy years?What uniform annual payment for 30 years is equivalent to spending $10,000 immediately, $10,000 at the end of 10 years, $10,000 at the end of 20 years, and $2,000 a year for 30 years? Assume an interest rate of 8%.how much did you deposit at the end of each month in an IRA that pays 7% compounded monthly to earn $70,000 per year from interest alone, while leaving the principal untouched, to be withdrawn at the end of each year after you retire in 30 years?
- Suppose that you are considering subscribing to “ABC” magazine. The magazine is advertising a one-year subscription for $60 or a three-year subscription for $166. You plan to keep getting the magazine for at least three years. The advertisement says that a three-year subscription saves you $14 compared to buying three successive one-year subscriptions. If the interest rate is 10%, should you subscribe for one year or for three years? (Assume that one year from now a one-year subscription will still be $60.)A bond with a face value of $1,000 has 8 years until maturity, has a coupon rate of 8%, and sells for $1,100. What is the yield to maturity if interest is paid once a year? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places. What is the yield to maturity if interest is paid semiannually? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places.First City Bank pays 9 percent simple interest on its savings account balances, whereas Second City Bank pays 9 percent interest compounded annually If you made a deposit of $7,500 in each bank, how much more money would you earn from your Second City Bank account at the end of eight years?
- You wish to retire in 14 years, at which time you want to have accumulated enough money to receive an annual annuity of $17,000 for 19 years after retirement. During the period before retirement you can earn 8 percent annually, while after retirement you can earn 10 percent on your money. What annual contributions to the retirement fund will allow you to receive the $17,000 annuity? Use Appendix C and Appendix D for an approximate.Provide answers in the form of a percentage to three decimal places . (a).What is the effective annual interest rate of a 4 % nominal annual interest rate compounded daily . (b).What is the effective annual interest rate of a 2 % nominal annual interest rate compounded weekly ? (c).What is the effective annual interest rate of a 7 % nominal annual interest rate quarterly ?How much will be in a bank account at the end of five years if $2000 is invested today at 12 percent interest per annum, compounded yearly?
