1.I want to have $2,000,000 saved by retirement. How much do I need to save each year for 40 years if the rate-of-return is 8%?

Suppose a state of California bond will pay $1,000 eight years from now. If the going interest rate on these 8-year bond is 6.4%, how much is the bond worth today?

$52,000 is invested in a 5-year fixed interest bond paying 5.5% per year. If interest is reinvested in the account, how much will the bond be worth in 5 years?  Round your answer to the nearest dollar.

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?

You pay $5600 for a municipal bond. When it matures after 15 years, you receive $11,000 The total return is ___%.

5.

We have a debt of $10 million in 15 years. If we want to ascertain that we have enough to meet this debt in 15 years, what year to maturity bonds should we invest in, if they pay 9% annually, and they have a YTM of 4%?   This is an immunization problem.

1. Calculate the future value of $9,000 invested (single amount) for ten years in an account with an APR of 6.3%. (Do not round interest rates.) a. If compounded annually? Future value = P (1+r)t 9,000(1+0.063)¹⁰= b. If compounded semiannually? c. If compounded monthly? d. Given equal rates, time, and investment amount, what effect does the frequency of compounding have on future values? What effect does the frequency of discounting have on present values? 2. Determine the rate that would be earned on a $25,000 investment if $100,000 is paid back in 25 years. Based on your answer, what factors would you consider in whether to invest or not. 3. A company has a $400 million liability that is due in 20 years. If the relevant discount rate is 5.25 percent, what is the present value of the liability? 4. What is the present value of an investment that will pay you $75 per year forever if the appropriate rate of return is 3%?

You are thinking about buying a savings bond. The bond costs $54 today and will mature in 7 years with a value of $108. What annual interest rate will the bond earn? The bond will earn an annual rate of %. (Round to two decimal places.)

You own a 8 year bond that has a face value of $20,000 and pays 10% a year in interest, once a year, at the end of the year. Two years after buying it, the interest rate increases to 13%. You do not want to wait 6 more years to get your principle of $12.000 back because you really need the money, so you decide to sell it on the open market. 1. How much can you sell it for? 2. Would it be a capital loss or gain and how much? How much is the capital gain or loss?