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- Present Values Krista Kellman has an opportunity to purchase a government security that will pay $200,000 in 5 years. Required: Note: Round answers to two decimal places. 1. Calculate what Krista would pay for the security if the appropriate interest (discount) rate is 6% compounded annually. 2. Calculate what Krista would pay for the security if the appropriate interest (discount) rate is 10% compounded annually. 3. Calculate what Krista would pay for the security if the appropriate interest (discount) rate is 6% compounded semiannually.11. Jared wants to invest money in a 6% savings account that compounds semiannually. Jared would like the account to have a balance of $110,000 2-years from now. How much must Jared deposit to accomplish his goal? 12. Pathfinder issues a bond with a coupon rate of 9%, face amount of $50,000, and is due in 5 years. Interest payments are made semi-annually. The effective rate for this type of bond is 10%. What is the issue price of the bond? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)#3 Imagine that a local water company issued a $10,000 ten-year bond at an interest rate of 6%. You are thinking about buying this bond one year before the end of the ten years, but interest rates are now 9%. a. Given the change in interest rates, would you expect to pay more or less than $10,000 for the bond? b. Calculate what you would actually be willing to pay for this bond.
- 1. John places $5.000in a savings account paying 10% interest compounded annually. He wants to know how much money will be in the account at the end of seven years2. If you sell $560K in January, your credit is: 1 month 50%, 2 months 30% and cash 20% the following is correct:3. You're planning on constructing a building that will be sold to somebody else at$12'500.000 ten years from now. You can, in the other hand, invest in a bond that pays 8%. If you are asked to invest $6'000.000 in the building, would you recommend to invest or not?18. An engineer has a current balance of P110 000.00 in his savings account. The bank will be giving 6% interest compounded semi-annually for the next two years and 8% interest compounded semi-annually thereafter. A large corporation is offering P10 000.00, 8% bonds that pay interest every six months for P11 000.00. If the maturity is five years, and bond earnings are deposited in the bank, should he withdraw and purchase the bonds, or should he leave his savings in the bank? Use future worth analysis. (Ans. Money should be left in the bank; P156 654.05; P147 706.39)You investing at a fixed 8.5% for the next 30 years. How much would you have to save each month for the next 30 years to have the amount of $ 114,780,500 they would need to pay the principal on a bond issue
- 1. You bought a bond five years ago for $935 per bond. The bond is now selling for $980. It also paid $75 in interest per year, which you reinvested in the bond. Calculate the real ized rate of return earned on this bond. 2. Refer again to the bond information in Problem 1. You expect to hold the bond for three more years, then sell it for $990. If the bond is expected to continue paying $75 per year over the next three years, what is the expected rate of return on the bond during this period? (LG 3-1)1) What is the current yield Of a bond whose face value is 33,200 and pays yearly interest at of 13.7% if purchased at 36,700) A) 12% B) 12.4% C) 12.7% D) 12.3% 2) millet wants to provide a ₱200,000 graduation gift for her daughter mae who is now 16 years old. she would like the fund to be available by the time her daughter is 20. she decides on an investment that pays 10% compounded quarterly. how large must the deposit be? A) Millet must deposit at least 137,000 B) Millet must deposit at least 138,000 C) Millet must deposit at least 135,000 D) Millet must deposit at least 136,000 3) What will be the maturity value of 12,000 invested for four (4) yearsat 15% compounded quarterly? A) Approximately 22,000 after four years B) Approximately 21,400 after four years C) Approximately 21,600 after four years D) Approximately 21,800 after four years 4) What is the maturity value of 3,000 invested at 9.5% compounded semi annually for 3.5 years? A) Approximately 4,400 after three…You bought a $1,000 face value Suffolk County, NY 10-year bond with equal annual amortization. A) How much principal will you receive each year? B) If the coupon rate is 4.3%/year, how much interest will you receive in year 1 and year 2?
