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1.What is the underlying concept of time value of money? 2.List the three characteristics of an annuity. 3. A12-year bond has a face value of

1.What is the underlying concept of time value of money?

2.List the three characteristics of an annuity.

3. A12-year bond has a face value of $1,000 and pays 8% interest annually.If the going (i.e., market)rate on bonds of similar quality is 11%, what is the most that you would pay for the bond?

4. Redo Problem 3 assuming that the bond pays 8% interest semi-annually.

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