Reference no: EM133004031
Suppose you invest $220,000 in an annuity that returns 11 annual payments, with the first payment one year from now and each subsequent payment growing by 7%. At an interest rate of 10%, how much is the first annual payment you receive? Equivalent problem structure (as a borrower): Suppose you borrow $220,000 to be paid back over 11 years with the first payment one year from now and each subsequent payment growing by 7%. At an interest rate of 10%, how much is the first annual payment? Please round your answer to the nearest hundredth.
A zero-coupon bond is a security that pays no interest, and is therefore bought at a substantial discount from its face value. If stated interest rates are 11% annually (with continuous compounding) how much would you pay today for a zero-coupon bond with a face value of $2,600 that matures in 7 years? Please round your answer to the nearest hundredth.
A financial institution offers a "double-your-money" savings account in which you will have $2 in 10 years for every dollar you invest today. What stated annual interest rate (assuming quarterly compounding) does this account offer? Please specify your answer in decimal terms and round your answer to the nearest thousandth (e.g., enter 12.3 percent as 0.123).
You have $50,000 in savings for retirement in an investment earning a stated annual rate of 11% compounded monthly. You aspire to have $1,000,000 in savings when you retire. Assuming you add no more to your savings, how many years will it take to reach your goal? Please round your answer to the nearest hundredth. Note that the HP 12c financial calculator rounds up the periods result to the next integer and will not give the correct answer to the nearest hundredth. Therefore, you should use Excel or a financial calculator that does provide decimal precision to the number of periods.
You deposit $2,200 in a bank account that pays 11% stated annual interest compounded continuously. What is the value of your investment at the end of 7 years? Please round your answer to the nearest hundredth.