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Calculate value of bond that matures in twenty years

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1. You invest $5,000 in an account bearing interest at the rate of 10% per year. What will be the future value of your investment in five years?

2. You will receive $10,000 in two years. If you had the money today you could invest it at 10% annual interest. What is the present value of the future amount you will receive?

3. You invest $2,000 in an account each year bearing interest at the rate of 10% per year. What will be the future value of your investment in five years?

4. You will receive $40,000 each year for the next ten years. If you had the money today you could invest it at 8% interest. What is the present value of the future amounts you will receive?

5. Calculate the value of a bond that matures in eight years, pays interest annually and has a $1,000 par value. The coupon interest rate is 11% and the market's required yield to maturity on a comparable risk bond is 12%.

6. Calculate the value of a bond that matures in twenty years, pays interest semi-annually and has a $1,000 par value. The coupon interest rate is 10% and the market's required yield to maturity on a comparable risk bond is 12%.

Reference no: EM133227584

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