Question
1. An investor bought a Treasury note on 5 February 2016. The note matured on 15 June 2016 and provided with the investor $5 million.
- 1. An investor bought a Treasury note on 5 February 2016. The note matured on 15 June 2016 and provided with the investor $5 million. To four decimal places, find the simple rate of discount per quarter used in the pricing if the investor paid $4.9 million originally.
2.Using a nominal rate of interest of 5% per annum convertible quarterly, find the amount required now to provide payments of $5,000 at times 0.25, 0.75, 1.25, 1.75, . . . , 9.25, 9.75 years from now. Give your answer to the nearest cent.
3.A contract provides an income of $1,500 a year for 10 years, followed by income of $2,500 a year for 10 years, and $3,500 a year for another 10 years (all cash flows are in arrear so that the final payment is 30 years from now). What is the total present value of the payments under this contract under effective rates of interest of 6% per annum for the first ten years, 5% per annum for the next ten years, and 4% per annum for the remaining 10 years? Give your answer to the nearest cent.
- 4.Underaspecialannuity,therearepaymentsattimest=1,2,3,...,30(inyears).Theamountofthepaymentattimetisthemaximumof$10,000(1.03t)and$18,000.Findthepresentvalueofthisspecialannuityusingaconstantforceofinterestof0.02956perannum.Giveyouranswertothenearestcent.
- please include all the steps
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