Reference no: EM131448246
1- Compute the future value of a $100, 3-year ordinary annuity compounded at 5%?
2- If you deposit $100 at the end of each year for 3 years in a savings account that pays 10% interest per year, how much will you have at the end of three years?
3- What is the future value of a 5-year ordinary annuity with annual payments of $200, evaluated at a 15 percent interest rate?
4- If you deposit $100 at the beginning of each year for 3 years in a savings account that pays 10% interest per year, how much will you have at the end three years?
5- What is the present value of an annuity that will pay $100 for three years if the required interest rate is 10%?
6- What is the present value of a 5-year ordinary annuity with annual payments of $200, evaluated at a 15 percent interest rate?
7- You just won the $30 million state lottery. You have the option to receive the jackpot in either one lump sum of $15 million or in 30 annual payments of $1 million each. Which option should you choose if the appropriate discount rate 6%?
8- What is the present value of an annuity that will pay $100 for three years if the required interest rate is 10%? The payments will be made at the beginning of the year Finding Annuity Pavments, PMT
9- We need to accumulate $10,000 and have it available 5 years from now. We can earn 6% on our money. Calculate the required annual deposit.
10- You wish to accumulate $250,000 in 15 years to pay for a year of travel. What equal amount do you need to save each year to achieve your objective if you can earn 7 percent per year on your investment"?
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Sell convexity-which bond will be preferred by investors
: Suppose bonds Y and Z are identical in terms of duration and coupon but bond Z is more convex. Market participants expect interest rates to fall sharply. Which bond will be preferred by investors? Which bond will have a higher required yield? How muc..
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The price-yield relationship for bonds is convex
: It is said that the price-yield relationship for bonds is convex. What does this mean? What role does convexity play in determining the rate of change in a bond price in response to changes in the required yield? Determine the percentage change in th..
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Is this mortgage conventional mortgage
: You are considering buying a house close to the university so that you can devote more time to your academic career. You have estimated that you can afford $3500 per month as a mortgage payment because you plan to rent rooms out to your friends. What..
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Calculate the periodic rate and the effective rate
: Assume that you are paying $1,000 to buy an asset that will pay $100 at the end of year one, $300 at the end of each of the following three years, and $500 at the end of the fifth year. Compute the rate of return on the investment. Suppose an investm..
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Compute the future value and present value of an annuity
: Compute the future value of a $100, 3-year ordinary annuity compounded at 5%? What is the future value of a 5-year ordinary annuity with annual payments of $200, evaluated at a 15 percent interest rate? What is the present value of an annuity that wi..
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Computer-based order entry system
: Your firm is contemplating the purchase of a new $565,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $57,000 at the end of that time.
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What is the after tax salvage value of the asset
: An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $6, 140,000 and will be sold for $1, 340,000 at the end of the project. If the tax rate is 30 percent, what is the after ta..
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Build an amortization schedule for a loan
: Build an amortization schedule for a loan with the following terms: $220,000 borrowed for 3 years at 15% APR compounded monthly with payments every 4 months. You may attached a spreadsheet printout or complete a table manually below.
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