Reference no: EM133074928

1. You a reviewing an investment and you expect that in 3-years time you will receive a return of $25,000 and you expect to receive this $25,000 per year for another 3 years beyond the first return (a total of 4 years of $25,000 in cash flows). Calculate the present value of these future cash flows. Assume a discount rate of 6%. Round your final answer to the nearest dollar.

2. You wish to retire in 35 years and you have estimated that you will need an amount of $1,500,000 to have a comfortable retirement. You wish to make 35 equal annual payments into an account at the end of each year. If you can earn 9% on your savings, compounded annually, over the next 35years, how much must they invest at the end of each year for the 35 years to have $1,500,000 by retirement?

3. You have recently made an investment a zero-coupon bond, which pays no annual coupon interest payments. It matures at the end of 5 years with a face value of $1,000. What is the current price of the bond if it is priced to yield 4%?

4. Silicone Ltd bonds have a coupon rate of 5%, paid semi-annually, face value of $1,000, and mature at the end of 4 years. What is the current price on this bond if its yield to maturity is 4%.