answer 7-10

1. Find the present value of a S100 received 5 years from now if the interest rate equals 10%. 2. How long will it take for $100 invested today to be worth $300 if the interest rate is 5% a year with monthly compounding? 3. Which is worth more, S1000 today or $3000 in 5 years assuming a discount rate of 6% a year? 4. An investment of $4000 in a 5 year CD will be worth how much at maturity if the rate is compounded daily? (365 days in a year) 5. A retiree invests S400 a month for 10 years at a rate of 6% a year. How much will she have at the end of the 10 years? 6. A 15 year mortgage has an annual rate of 2.4%, calculate the monthly payments on a $200,000 loan. 7. Assuming a 30 year mortgage with an annual rate of 3% (with monthly payments of S500) and a S10,000 down payment what is the most money that an individual can spend on a house? 8. A firm has $2,000,000 in a fund that is used to pay creditors. The fund carns 1.5% a year. If withdrawals are made once a week for 5 years (with no money left after the 5 years), how much money can be taken out each week? 9. A company has been making monthly payments on a 10 year loan that was originally for $800,000. Its borrowing rate was 8.6% a year. How much does it still owe on the loan after 67 payments? 10. Which is more risky? A ten year Treasury bond or a 3 month Treasury note? Explain