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What is the future value of periodic payments

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Question - Calculate the following time value of money problems.

a. What is the future value of 15 periodic payments of $6,200 each made at the beginning of each period and compounded at 6% per period?

b. What would you pay for a $400,000 face value bond that matures in 15 years and Days $25,000 a year in interest (end-of-period payments) if you wanted to earn a yield of 6%.

c. Mike Finley wishes to become a millionaire. His money market fund has a balance of $444,011.96 and has a guaranteed interest rate of 7%. How many years must Mike leave that balance in the fund in order to get his desired $1,000,000?

d. Andrew Bogut just received a signing bonus of $1,000,000. His plan is to invest this payment in a fund for 8 years (his planned retirement date). If Bogut plans to establish the AB Foundation once the fund grows to $2,304,537.77, what annually compounded interest rate must he earn to achieve his goal?

Reference no: EM133060354

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