FIN 30 021 Module 2 [ Formula] part ) Dsimple Interest (short term investment / loans ) [ = P x TOD X Ve number of days eg. 7days : 7/365 principal Amount owed : principal + interest OR S = P ( 1 + 100 *n P [interest permonth principal + interest PMT " Compound Interest FV FV = PVCIt ijn PV - (it[)n Pu = Po ( 1 ti ) n eg . pthly compounded Monthly ( + 12 ) interest $ 12 1 x 12 (3) Nominal & Effective Rate * Effective rate > Nominal Rate. (less than 1 yr ) conversion formula ( a ) convert norminal to effective ie = (1 + i

;(p ) + nominal rate interest rate d'p ) >, de ie > de effective discount rate . * nominal discount rate > effective discount rate Part 2 1 ordinary Annuity ( PET made at the and of the period) PV of annuity = PMT | 1 - Cltijn ? FV of annuity : pmy [ Citi)h - 1 () Annuity Due ( PMT made at the beginning of the period) Bond PV = PMT [1 - litin 1 x citi ) FV = PMT / 1 1 + 2 ) n = " JC , to ) 3 sum of the series\fNO Q1) Nominal & Effective Rate * Effective rate > Nominal Rate. (less than 1 yr ) last coupe conversion formula dot (C ) convert norminal to effective ( 6) convert effective to nominal up) = p ( ( 1 tie ) " p - 1 ] compounding frequency (eg. lyr compound 12 times) P = 12 . 4 continuously compounded. * i ( nominal rate ) F V = pu e r t R yr continuously monthly annual compounded - compounding > compound conversion to effective rate E nominal Bon le : . er - 1 Intere 5) Discount rate Must be in effective rate . cha reti vers PV = FV ( 1 - d ) present = FV - discount value amount efai . ris de : 1 - L EV FV = PV + interest FV = PV ( 1 tixt) leg. 90 days = 90/ 365 de = it: de = IV * Discount rate must in effective rate so the interest must change from nominal to effective2 SAME! (4) Bill yield - ) Bond yield yshort - term " long-term i - 365 d 360 pricing * All must in semiannually @ coupons a face value con coupon date ?)st of the money Face value P = = [itrit + P : Cans i +10own (itr)" zero- coupon bonds. * must in semi-annually. P = me PV : FV (itr)" (itijn Pricing not on coupon date [Reserve Bank formed) Bon Price : V [c + gani + 100 vn] * 9 d.p Intere but must find v = citi ) to calculate this ) . cha reti an:i = ( 1 - vn ) ers efal i (4) Dirty Price : clean Price + 1 - Accrued interest before ex-interest - cum ext. after ex - interest Capital Amount date date 5) Accrued interest = gc1 -f ( cum ) @Accrued interest = - gx * (ex )g . = 2. 45 + 2 2 1. 325% HPY for bonds: CO Price at end of period + value of coupons received & Price at beginning of period. invested 21/8120 caupon yield = coupon face value current yield = coupon price . Linear interpolation guess price - actual price guess rate - x guess price - 100.00 guess rate - coupon rate onQuestion 1 1 pts I wish to borrow $839,745 to buy a house. If the current interest rate on the loan is 6.34%p.a., for 21 years, then how much would my monthly repayment be? Please give your solution correct to 2 decimal places 6.034.56Question 2 1 pts You are going to invest $100 into an investment each month for the next 20 years. In the end, you want to have a balance of $300,000. To achieve this goal, what does the investment have to be earning ( ie the rate)? Please give your answer correctly to 2 decimal places. 1.06Question 1 pts What is the yield for a 72-day Treasury Note with a face value of $600,000 and a price of $566,574? Express your answer as a percentage - not as a decimal. eg Use 6.45, not 0.0645 and to 2 decimal places 29.91Question 3 1 pts What is the future value if we commence payments today of $110 per week for the next 25 years at 9.92% pa compounded weekly? Give your answer correct to 2 decimal places. 629.262.62Question 5 1 pts What is the holding period yield, if I bought a $100,000 90-day bill at 9.83% and sold it 46 days later at 8.95%pa? Express as a percentage and to 2 decimal places eg not 0.0625 but 6.25. 10.17Question 7 1 pts If the interest rate is 5.55% pa what is the equivalent discount rate? Give your answer correct to 2 decimal places: eg, not 0.0625 give 6.25 5.26Question 6 1 pts A 6% $100,000 bond has exactly 5 years to maturity and pays semi- annually. What is the price of the bond if the yield is 7.99%pa? Give your answer to two deicmal places 91,927.65Question 9 1 pts On the 4th June 2021, the price for the 4.5%, 15th of January 2034 was $124.250. Calculate the implied yield to maturity for this bond. Assuming semi-annual coupons Give your answer correct to 4 decimal places and express the answer as a decimal. eg not 0.0625 but 6.25.Question 8 1 pts Calculate the price for a 7% 21st of October 2034 CGB when the yield is 6.714% on the 17th April 2021? Assume the par value is $100 and give your answer correct to 4 decimal places 103.3304Question 10 1 pts On the 18th July 2020, I purchased a 2.45%, 21st August 2030 CGB at a yield of 1.346%. then on the 16th of September 2021 on sold it when the yield was 1.228%. Assuming the reinvestment rate was 1.25%pa simple interest, what was the holding period yield for this investment? Express your answer as a percentage to 3 decimal places. eg not 0.0625 but 6.253