Question: 4 . You will receive $ 4 0 , 0 0 0 at the end of each year for the next ten years. If you

4. You will receive $40,000 at the end of each year for the next ten years. If you had the money today you could invest it at 8% interest. What is the present value of the future amounts you will receive? Module Six Homework 1. You invest $5,000 in an account bearing interest at the rate of 10% per year. What will be the future value of your investment in five years? Future Value of $1 Today's Investment Interest Rate FV = # of Years 2. You will receive $10,000 in two years. If you had the money today you could invest it at 10% annual interest. What is the present value of the future amount you will receive? Present Value of $1 Future Value Interest rate # of Years PV=3. You invest $2,000 in an account at the end of each year bearing interest at the rate of 10% per year. What will be the future value of your investment in five years? Future Value of Annuity Investment Annual Interest Rate # of Years FV =4. You will receive $40,000 at the end of each year for the next ten years. If you had the money today you could invest it at 8% interest. What is the present value of the future amounts you will receive? Present Value of Annuity Future Value Interest Rate # of Years PV=5. Calculate the value of a bond that matures in eight years, pays interest annually and has a $1,000 par value. The coupon interest rate is 11% and the markets required yield to maturity on a comparable risk bond is 12%. Bond Value Par Value Coupon Rate Required Yield to Maturity Periods to Maturity Interest Payment Bond Value: Present Value of Future Interest Payments Present Value of Future Par Value Bond Value: 6. Calculate the value of a bond that matures in twenty years, pays interest semi-annually and has a $1,000 par value. The coupon interest rate is 10% and the markets required yield to maturity on a comparable risk bond is 12%. Bond Value Par Value Coupon Rate Required Yield to Maturity Periods to Maturity Interest Payment Bond Value: Present Value of Future Interest Payments Present Value

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