Explore BrainMass

Explore BrainMass

    Time Value of Money

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    1. A bond is selling for 95% of par and has an annual coupon rate of 6% and will mature in five years. There are semi-annual coupon payments. Calculate the yield-to-maturity.

    2. How much money will William have in five years if he places $2500 into a CD earning an annual interest rate of 7.5% compounded annually?

    3. An ordinary annuity has equal periodic cash flows at the_____ of the period and an annuity due has equal periodic cash flows at the_________ of the period.

    4. Your firm is planning to invest $350,000 per year in equal annual end-of-the-year cash flows to fund a capital improvement fund. If the investments are expected to earn 10% per year, how much will the account be worth in 7 years?

    5. Your parents put equal annual beginning-of-the-year deposits of $1,200 into an account earning 8% per year from the day you were born until your 18th birthday (a total of 19 deposits). How much money is in that account today?

    6. Tucker Binson put $5,000 into a three-year CD paying 7% interest compounded quarterly. How much interest will he have earned when the CD matures?

    © BrainMass Inc. brainmass.com June 3, 2020, 7:02 pm ad1c9bdddf
    https://brainmass.com/business/annuity/time-value-of-money-84642

    Attachments

    Solution Summary

    The solution has various time value of money problems

    $2.19

    ADVERTISEMENT