Risk-free bond-what is pv of the bond

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1. Suppose you save $18000 per year in an ordinary annuity promising you an interest rate of i = 3.05% compounded once per year. How much will you have after 25 years?

2. A risk-free bond will pay you $1000 in 1 year. The annual discount rate is i = 3.45% compounded annually. What is PV of the bond?

3. A risk-free bond will pay you $1000 in 2 years and nothing in between. The annual discount rate is i = 3.15% compounded annually. What is the bond’s PV?

Reference no: EM131979010

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