6. An initial sum of $50,000 is invested in a bond. You will receive payments of $2,000 semi-annually for 10 years. a. What is the semi-annual interest rate this bond pays? b. If you sold the bond after 5 years for $60,000 what would be your rate of return?
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- You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuityUse the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?5. An investor buys a 150 TL investment fund from the bank and sells it for 165 TL after 25 days. What is the % of Annual Effective Return? 6. If the monthly (periodically) interest is 1% for a one-month deposit, what is the Annual Effective Return?
- 3. A $500 savings bond pays 6.5% compounded semiannually and matures in 7.5 years. A. What is the purchase price? B. How much interest will be earned? C. How long it takes the initial investment to double?5. Suppose you save $19,000 per year in an ordinary annuity promising you an interest rate of i = 7.625% compounded once per year. How much will you have after 35 years? 6. A risk-free bond will pay you $1000 in 1 year. The annual discount rate is (= 19.69% compounded annually. What is the bond's present value?You purchased a P5,000 bond for P5,100. The bond pays P200 peryear. It is redeemable for P5,050 after 10 years. What is the net rateof interest on your investment? DRAW CASH FLOW DIAGRAM
- you purchases a $1000 face value bond for $950. you held the bond for 10 years until it doubles in face value. what rate of return did you earn over the 10 years. Assume yearly compoundingYou have decided to buy a perpetual bond. The bond makes one payment at the end of every year forever and has an interest rate of 8%. If the bond initially costs 4000$, what is the payment every year?Please do both correctly, I'll rate the answer Question: (i) A $10,000 bond is purchased for $9600 and has a bond rate of 6% per year payable semiannually for 2 years. What is the interest rate? (ii) You borrow 35,000 for 10 years at 10% per year compounded monthly. After making 24 payments you decide to pay the loan off. What's that payoff amount?
- You have decided to buy a perpetual bond. The bond makes one payment at the end of every year forever and has an interest rate of 7%. If the bond initially costs $5000, what is the payment every year?4. If you borrow $200,000 at an APR of 8% for 25 years, you will pay more per month than borrow the money for 30 years at 8%. a. What is the monthly payment on the 25-year mortgage, to the nearest cent? b. What is the total interest paid on the 25-year mortgage? c. What is the monthly payment on the 30-year mortgage? d. What is the total interest paid on the 30-year mortgage? e. How much more interest is paid on the 30-year loan? Round to the nearest dollar. f. What is the difference between the monthly payments of the two different loans? Round to the nearest dollar.You purchased a bond and will receive $500every six months for the next five years. If the market rateof interest is 4%, what is the present value of your stream ofinterest payments? (a stream of equal interest payments isconsidered an annuity).