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?