What is the present value of :
a. $7,900 in 10 yrears at 11 percent?
b. $16,600 in 5 years at 9 percent?
c. $26,000 in 14 years at 6 percent?
How much would you have to invest in today to receive:
a. $15,000 in 8 years at 10 percent?
b. $20,000 in 12 years at 13 percent?
c. $6,000 each year for 10 years at 9 percent?
d. $50,000 each year for 50 years at 7 percent?
You wish to retire in 14 years, at which time you want to have accumulated enough money to receive an annual annuity of $17,000for 19 years after retirement. During the period before retirement you can earn 8 percent annually, while after retirement you can earn 10 percent on your money. What annual contributions to the retirement fund will allow you to receive the $17,000 annuity?
Your younger sister Linda will start college in 5 years. She has just informed your parents that she wants to go to Hampton University, which will cost $17,000 per year for four years (cost assumed to come at the end of each year). Anticipating Linda's ambitions, your parents started investing $2,000 per year five years ago and will continue to due so for five more years . How much more will your parents have to invest in each year for the nest five years to have the necessary funds for Linda's education? Use 10 percent as the appropriate interest rate throughout this problem (for discounting or compounding).
You are called in as a financial analyst to appreciate the binds of Olsen's Clothing Stores. The $1,000 par value bonds have a quoted annual interest rate of 10 percent which is paid semiannually. The yield to maturity on the bonds is 10 percent annual interest. There are 15 years to maturity.
a. Compute the price of the bonds based on the semiannual analysis.
b. With 10 years to maturity, if yield to maturity goes down substantially to 8 percent, what will be the new price on the bonds?