A US savings bond will pay you $1,000 in 3 years. If return is 2.85%, how much shoudl you pay for the bond today?

Q: You are considering a savings bond that will pay $100 in 10 years.  If the interest rate is 2%, what…

A: Future value =$100 Interest = 2% Time =10 years So, Present value = Future value/(1+ interest)^time…

Q: 0. You are considering a savings bond that will pay $700 in 15 years. If the interest rate is 2%,…

A: Future Value = fv = $700Time = t = 15 yearsInterest Rate = r = 2%

Q: You are thinking about buying a savings bond. The bond costs $70 today and will mature in 10 years…

A: Bond cost = $ 70 Period = 10 Years Maturity value = $ 155

Q: A $5,000 bond is offered for sale. It has a stated interest rate of 7% paid ann end of 8 years, the…

A: Price of bond is sum of present value of the interest payment and present value of face value of…

Q: You are thinking about buying a savings bond. The bond costs $57 today and will mature in 10 years…

A: Present Value = pv = $57Time = t = 10 YearsFuture Value = fv = $114

Q: You expect to have $1000 in one year.  A bank is offering loans at 6% interest per year, how much…

A: Given: Money invested today (C)= $1000 Interest rate (r) = 6% =0.06 Number of years (n) = 1

Q: A 1000 bond bearing interest at 5.4% payable semi-annually is due in three years. If money is worth…

A: Purchase price of bond can be calculated by determining the present value of bond plus present…

Q: One-year T-bill rates are 2% currently. If interest rates are expected to go up after 3 years by 2%…

A: T-Bills are debt security which is issued for shore time period, issued by US government. It is…

Q: You are thinking about buying a savings bond. The bond costs $42 today and will mature in 13 years…

A: Principal amount invested now will become certain amount after certain period of time at specific…

Q: You are thinking about buying a savings bond. The bond costs $48 The bond will earn an annual rate…

A: Present Value = pv = $ 48Time = t = 12 YearsFuture Value = fv = $ 98

Q: If the interest rate is 15%, what is the present value of a security that pays you $1,100 next year,…

A: Time value of money is one of important concept being used in finance. As per this concept, a sum of…

Q: ou are offered an annuity that will pay R17,000 per year for 7 years (the first payment will be made…

A: Given: Annuity amount = R17,000 Year = 7 Discount rate = 11%

Q: 6. An initial sum of $50,000 is invested in a bond. You will receive payments of $2,000…

A: a. Semi - Annual Interest Rate: Given: Investment amount = $50,000 Semi-Annual Interest received =…

Q: what is the payment every​ year

A: To calculate the payment at the end of each we will use below formulaAnnual payment = PV*rWherePV -…

Q: You have decided to buy a perpetual bond. The bond makes one payment at the end of every year…

A: Interest Rate = r = 5%Initial Cost of Bond = ic = $3000

Q: A simple "EE US Treasury Savings Bond" pays the holder $1000 in 30 years. Given that the applicable…

A: To calculate  the bond cost we will use the below formula   Bond cost today = FV/[1+(r/m)]n*m Where…

Q: ppose in the question above, the tuition obligations have a Macaulay duration of 4.35 in years, and…

A: Duration of the bond shows the weighted period of the bond required to recover the all cash flow…

Q: Imagine that a $10,000 ten-year bond was issued at an interest rate of 6%. You are thinking about…

A: Using excel PV function to calculate the amount you will be willing to pay for this bond.

Q: You plan to invest in bonds that pay 3.25%, compounded annually. If you invest $10,000 today, how…

A: Given: Interest rate is 3.25% Present value $10,000 Future value = $30,000 Number of years =?

Q: 18. You are borrowing $700,000 for 30 years at 6% annually. The lender is charging you a 2 point…

A: Effective interest rate simply means annual interest rate. It contrasts the interest rates of two…

Q: If a bond will pay $50 interest per year into perpetuity, at what price will this bond sell when the…

A: perpetuity: It is annuity for the infinite time. present value of perpetuity formula: present value…

Q: You pay $25.00 for a bond which can be redeemed in 20 years for $50.00. What annual rate does this…

A: In this question we need to calculate the annual rate of return from the bond.

Q: You would like to save up $13907 to travel in 9 years.  To do so, you will buy a savings bond that…

A: Bonds are an important financial instrument for both investors and issuers, providing a way to raise…

Q: If you want to earn 7% annual simple interest on an investment, how much should you pay for a note…

A: Simple interest is the type of interest that is calculated on the original amount, It is calculated…

Q: You purchased a bond and will receive $500 every six months for the next five years. If the market…

A: Present value of annuity can be computed by using the following formula: Here,…

Q: A man bought a government bond which cost P1000 and will pay P50 interest each year for 20 years.…

A: The rate of return on the bonds is the minimum required return on the investment made by the…

Q: Suppose a State of Califomla bond will pay 1,000 eight years from now. If the going interest rate on…

A: Worth of the bond can be calculated by discounting the future cash flow of the bond at the given…

Q: You expect to have $12,000 in one year. A bank is offering loans at 5.5% interest per year. How much…

A: We are given  Future value=12000 Rate=5.5% no. of years=1 We will calculate present value in this…

Q: You are considering a savings bond that will pay $100 in 8 years. If the interest rate is 2.2%, what…

A: The objective of this question is to find out the present value of a savings bond that will pay $100…

Q: You need to borrow $206616 to buy a house today. If the bank offers you 3.14% APR per year, what is…

A: Compound = Monthly = 12Present Value = pv = $2066.16Interest Rate = r = 3.14 / 12 %Time = t = 30 *…

Q: You have decided to buy a perpetual bond. The bond makes one payment at the end of every year…

A: To calculate the payment at the end of each we will use below formula   Annual payment = PV*r Where…

Q: 52,000 is invested in a 5-year fixed interest bond paying 5.5% per year. If interest is reinvested…

A: Bond is a debt security which is issued by the organizations to raise funds. The investment in bonds…

Q: How much  would you pay for a $30,000, 4 year, 5% bond if I want a return of 7%  { assume bond pays…

A: Given: Bond face value = $30,000 Coupon = 5% Semi annual coupon rate =2.5% So, semi annual coupon…

Q: You have decided to buy a perpetual bond. The bond makes one payment at the end of every year…

A: Perpetual bonds do not have a principal payback requirement, in contrast to ordinary bonds, which…

Q: You would like to save up $1184 to travel in 4 years.  To do so, you will buy a savings bond that…

A: The concept of time value of money will be used here. Money kept in an investment attracts interest…

Q: What is the interest rate if Php55, 200 become Php88, 100 after 4 years?

A: The value appreciated with the interest element at a certain rate for a certain period of time is…

Q: A bank is willing to lend money at 6% interest, compounded annually. How much would the bank be…

A: Given interest rate = 6% Interest is compounded annually. Payment to be received after 4 years =…

Q: You are thinking about buying a savings bond. The bond costs $54 today and will mature in 7 years…

A: Present Value of Bond = pv = $54Time = t = 7 yearsFuture Value of Bond = fv = $108

Q: If the interest rate is 6.0%, what is the present value of a perpetuity paying $265 per year? (A…

A: Perpetuity refers to a constant stream of identical cash flows at regular intervals with no end.…

Q: Suppose that savings and other investments will pay you 4% interest. A bond promises to pay you and…

A: Annual payment = $200 Interest rate = 4%

Q: You will receive $1000 from a savings bond in3 years from now. The nominal interest rate is 8% and…

A: Future value is the value of present cashflow compounded at a given rate to future date. formula:…

Q: If you want to earn 7% annual simple interest on an investment, how much should you pay for a note…

A: A method of computing interest amounts in which the compounding effect was not considered by the…