Question
In: Finance
3. What is the future value of $15,000 saved at i=38.45% , compounded semi-annually in 2...
3. What is the future value of $15,000 saved at i=38.45% , compounded semi-annually in 2 years?
4. What is the future value of $15,000 saved at i=38.45% , compounded quarterly in 2 years?
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 $1,000 in 1 year. The annual discount rate is i=19.69% compounded annually. What is the bond’s present value?
7. A risk-free bond will pay you $1,000 in 2 years and nothing in between. The annual discount rate is i=67.5% compounded annually. What is the bond’s present value?
Solutions
Expert Solution
3)
| Future value | PV×(1+r)^n | |
| Here, | ||
| A | Interest rate per annum | 38.45% |
| B | Number of years | 2 |
| C | Number of compoundings per per annum | 2 |
| A÷C | Interest rate per period ( r) | 19.23% |
| B×C | Number of periods (n) | 4 |
| Present value (PV) | $ 15,000 | |
| Future value | 30,308.23 | |
| 15000×(1+19.23%)^4 |
jeff jeffy answered 1 year agoRelated Solutions
4. What is the future value of $15,000 saved at i=38.45% , compounded quarterly in 2...
4. What is the future value of $15,000 saved at i=38.45% ,
compounded quarterly in 2 years?
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 $1,000 in 1 year. The annual
discount rate is i=19.69% compounded annually. What is
the bond’s present value?
7. A risk-free bond will pay you $1,000 in...
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$
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round your answer to 2 decimal places, e.g., 32.16.) Future value
$
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