Question
1.) Clyde wants to buy a car in two years. His Uncle Bill will give him $1,000 every 3 months for one year. If deposited
1.) Clyde wants to buy a car in two years. His Uncle Bill will give him $1,000 every 3 months for one year. If deposited money earns 8% what will Uncle Bill's contribution equal when Clyde buys his car? YOU MUST SHOW YOUR WORK AND SET UP PROBLEM in the same manner as the HOMEWORK. Hint: this is two TVM problems. You MUST include: 1. Identify the type of problem. 2. Write out the formula identifying the rate and term in the factor. 3. Solve with a complete formula.
2.)Canal Inc. has an $1,000 par value bond with 15 years to maturity and a coupon rate of 14%, paid semiannually. The market rate on similar debt has now risen to 16%. What is the current price of this bond? |
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