1.
If you require a rate of return of 16.5%, how much would the future value be at the end of the last year from the following cash flow stream?
Answer just the dollar amount without the + or - sign. Round to
the nearest dollar.
Years: |
0 |
1 |
2 |
3 |
4 |
CFs: |
$0 |
$75 |
$225 |
$0 |
$300 |
2.
What annual payment must you receive in order to earn a 6.5% rate of return on a perpetuity that has a cost of $1,000?
Answer just the dollar amount without the + or - sign. Round to the nearest dollar.
3. Suppose a bond will pay $4,500 ten years from now. If the going interest rate is 5.70% for this bond's risk class, how much is the bond worth today?
Answer just the dollar amount without the + or - sign. Round to the nearest dollar.
4. You want to commercialize your innovation 4 years from now, and you plan to save $5,900 per year, beginning immediately. You will make a total of 4 such deposits in an account that pays 5.7% interest. How much will you have 4 years from today?
Answer just the dollar amount without the + or - sign. Round to the nearest dollar.
1)
2)annuity= perputity*ROI
=$1000*6.5%
=$65
3)bond price = maturity vlaue/(1+ytm)n
=$4500/(1.057)10
=4500/1.7408
=$2485.01
4)
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