Q. No. 02: Find the future value of the following annuities. The first payment in these annuities is made at the end of Year 1, so they are ordinary annuities. a) $300 per year for 10 years at 10% b) $100 per year for 5 years at 5% c) $300 per year for 5 years at 0% d) Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due.
Q. No. 02: Find the future value of the following annuities. The first payment in these annuities is made at the end of Year 1, so they are ordinary annuities. a) $300 per year for 10 years at 10% b) $100 per year for 5 years at 5% c) $300 per year for 5 years at 0% d) Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Q. No. 02: Find the future value of the following annuities. The first payment in these annuities is
made at the end of Year 1, so they are ordinary annuities.
a) $300 per year for 10 years at 10%
b) $100 per year for 5 years at 5%
c) $300 per year for 5 years at 0%
d) Now rework parts a, b, and c assuming that payments are made at the beginning of each
year; that is, they are annuities due.
Q.No. 03: Solve following time line, draw a clear diagram in your answer sheet. Assume
opportunity cost of 12%
6
7
3
500
500
500
300
300
300
300
300
Q. No. 04: Discuss following terms with examples;
a) Perpetuity
b) Par Value
c) Coupon Rate
d) Zero-Coupon Bond
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