5 The following question is related to Discounted Cash Flow Valuation. Please use the calulator to answer the questions You have an opportunity for an investment that will pay you the following the following: Year 1 $175 $157.66 Year 2 $350 $284.07 Year 3 $545 $398.51 Year 4 $765 $503.92 Year 5 $980 $581.57 If you can earn 11% on a similar investment, what is the most you would pay for this investment? Use the calculator to determine your answer. NPV = 6 The following questions are related to Annuities. Please use the calulator to answer the questions. You decide that you want to save money towards your retirement, so you open an IRA account and deposit $1,500 per year. If you are able to receive a 5.5% interest rate on the account, how much money will be in the account in 35 years? Answer You and your spouse are looking to save for a new house. You decide that you are going to put $15,000 in a bank account yearly and that acoount will pay an interest rate of 7%. You will be making the first payment today. How much will you have account at the end of 5 years? Answer 7 The last few questions will deal with Bond pricing and taxable vs. non-taxable bonds. Please use the calulator to answ questions. Portside Inc.'s bonds mature in 9 years, have a par value of $1,000, and have an annual coupon rate of 7.5%. The market interest rate for the bonds is 9%. What is the price of the bond? Answer A 27-year, $1,000 par value bond has an 7.5% annual coupon. The bond currently sells for $752. If the yield to maturity remains at its current rate, what will the price of the bond be 6 years from now? Answer ily = Answer Price in 6 years