What will be the purchase price

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Reference no: EM131990239

1. John puts $1,000 into an account that pays an interest of 8% at the end of year 1. The next year, John increases the amount he deposits into the account by 10%. John increases the deposit amount by 10% each year. John makes a total of 10 deposits. How much money does John have in his account at the end of 10 years?

A. $10,070

B. $14,486

C. $21,741

D. $10,000

2. A county issued a $1 million 10 year bond in 2010. It’s coupon rate is 5% paid semi-annually. Today, after 7 years (there is 3 years left on the bond), someone wants to purchase the bond. The current interest rate is 6% semi-annual. What will be the purchase price?

A. $827,894

B. $972,914

C. $906,445

D. $1,000,000

Reference no: EM131990239

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