1. A zero-coupon bond is a security that pays no interest, and is therefore bought at a substantial discount from its face value. If stated interest rates are 5% annually (with continuous compounding) how much would you pay today for a zero-coupon bond with a face value of $1,200 that matures in 9 years Please round your answer to the nearest hundredth.
2. A financial institution offers a "double-your-money" savings account in which you will have $2 in 7 years for every dollar you invest today. What stated annual interest rate (assuming monthly compounding) does this account offer? Please round your answer to the nearest hundredth.
3. You have $50,000 in savings for retirement in an investment earning a stated annual rate of 8% compounded semi-annually. You aspire to have $1,000,000 in savings when you retire. Assuming you add no more to your savings, how many years will it take to reach your goal? Please round your answer to the nearest hundredth.
4. You deposit $300 in a bank account that pays 6% stated annual interest compounded quarterly. What is the value of your investment at the end of 10 years? Please round your answer to the nearest hundredth.