Question
1. Suppose you save $12000 per year in an ordinary annuity promising you an interest rate of 9.03% compounded once per year. How much will
1. Suppose you save $12000 per year in an ordinary annuity promising you an interest rate of 9.03% compounded once per year. How much will you have after 35 years?
2. A risk-free bond will pay you $1000 in 1 year. The annual discount rate is 1.75% compounded annually. What is the bonds present value?
3. A risk-free bond will pay you $1000 in 2 years and nothing in between. The annual discount rate is 3.25% compounded annually. What is the bonds present value?
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Financial Risk Manager Handbook
Authors: Philippe Jorion
6th Edition
0470904011, 978-0470904015
