Reference no: EM132916407
Questions -
Q1. You opened a savings yesterday by depositing $10,000. You then continued to make deposits of $4,000 a year. You plan on taking a vacation once the account reaches a balance of $100,000. How many deposits will you need to make if the account is expected to earn 4% per year?
Q2. Currently the S&P is returning 12% while Treasury bonds are returning 3%. If a stock has a beta of 1.1 and an expected return of 7%, what is the required return for this stock?
Q3. What would be the maximum price you should pay for a 10 year annuity that will provide payments of $800 a year? Assume the appropriate interest rate for this type of investment is 7%.
Q4. You opened a savings yesterday by depositing $10,000. You would like to be able to withdraw $2,000 per year for each of the next 4 years of college and still have $3,000 left in the account when you graduate. What interest rate does this account need to earn?
Q5. You just purchased a $30,000 car by taking out a $25,000 loan. If the loan requires 6 yearly payments with an annual interest rate of 5%, how much will each payment be?