Problem #3: A bond with face value of $5,000 pays quarterly interest of 1.5% each period. Twenty six(26) interest payments remain before the bond matures. How much would you be willing to pay forthis bond today if the next interest payment is due now and you want to earn 8% compoundedquarterly on your money?Note: Coupon Rate is 1.5% per quarter. Interest rate is 2% per quarter.

Given in question. Quarterly interest amount Present value of bond

Answered: Problem #3: A bond with face value of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A geometric gradient that increases at f= 5% per year for 15 years is shown in the accompanying diagram. The annual interest rate is 10%. What is the present equivalent value of this gradient? AClick the icon to view the diagram for geometric gradient values. Click the icon to view the interest and annuity table for discrete compounding when i= 5 % per year. Click the icon to view the interest and annuity table for discrete compounding when i= 10% per year. 4... The present equivalent value of the gradient is $ (Round to the nearest dollar.)
(3) Suppose we invested $20,000 at an annual rate of 5% where interest is compounded continuously. (a) Write down an IVP that describes the amount of money y(t) that you will have in your account after t years. Then, solve the IVP and compute how much money you expect to have in your account after 10 years. (b) Now suppose you want to have $100,000 in your account after those 10 years. In order to accomplish that, you will make yearly deposits of D dollars. Find D, so that y(10) = $100,000. Note that we still have y(0) = $20,000.
You are saving up for a down payment on a house. You will deposit $600 a month for the next 24 months in a money market fund. How much will you have for your down payment in 24 months if the fund earns 12% APR compounded monthly?
You borrowed $10,000 from a local bank, with the agreement that you will pay back the loan according to a graduated payment plan. If your first payment is set at $1,500, what would the remaining payment look like at a borrowing rate of 7% over five years? (the value of G approximately is...) $10,000 0 $1.500 20 30 4G
You invest $10,000 in a fund that pays 7% per year for 5 years. How much is in the fund at the end of 5 years if (forgetting leap years and making “convenient” assumptions): a. Compounding is annual? b. Compounding is quarterly? c. Compounding is monthly? d. Compounding is daily?
How much interest is payable each year on a loan of $3,000 if the interest rate is 12% (simple interest) per year when half of the loan principal will be repaid as a lump sum at the end of five years and the other half will be repaid in one lump-sum amount at the end of eight years? How much interest will be paid over the eight-year period? The interest amount is paid at the end of each year. Year. Interest Accrued for Year 1 ? 2 ? 3 ? 4 ? 5 ? 6 ? 7 ? 8 ? Total Interest ?
Austin received a 15 year loan of $320,000 to purchase a house. The interest rate on the loan was 2.30% compounded semi-annually. a. What is the size of the monthly loan payment? b. What is the balance of the loan at the end of year 2? c. By how much will the amortization period shorten if Austin makes an extra payment of $30,000 at the end of year 2? months years ANSWER EVERYTHING TO THE NEAREST CENT
You plan to deposit $100 at the end of every quarter (3 months) for 8 years starting at the end of month 3. Then after leaving the money in the account for several years, you plan to withdraw everything 15 years from today. How much is available to withdraw at the end of year 15 if the account pays a nominal annual rate of 8% compounded quarterly (every 3 months)? Question 4 Part C: Provide the final value for withdrawal at the end of year 15. Enter your answer in the form: 12345.67
A company has issued a 20 year bonds, with a face value of $50,000. Interest at 8% is paid quarterly. If an investor desires to earn 12%, compounded quarterly, what would be the purchase price of the bond?
Please answer only handwritten
1. Assume you graduate with a student loan total of $28,000. You are going to pay off this loan with monthly payments for the next 8 years. The monthly interest rate is 0.25%. What is your monthly payment amount? (Answer is not 3,539.49)
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