BUSINESS MATHEMATICS- MAKEUP

IMPORTANT NOTE: Please forward at three digits numbers after decimal point in your calculations.

Assignments must be written with readable handwriting. All calculations must be explained in detail with at least three sentences. These explanations are going to be evaluated individually, and be effective on examination marks. Illegible writing is not going to be evaluated (I don't have to be read). The assignments must be uploaded until the deadline, otherwise I don't accept.

1.I will invest TL 500 per quarter for my retirement at 7.3% compounding quarterly for 32 years. I have a choice of making that payment of TL 500 at the beginning or the end of the quarter.

a)In which account will I have more money and by how much? Explain (15 points)

b)Which account will earn the most interest and by how much? Explain(10 points)

2.ALFA Corp. has bonds on the market with 11.5 years to maturity, a YTM of 6,6%, and a current price TL 932. The bonds make semiannual payments. What must the coupon rate be on the bonds? (20 points)

3.I am setting up a fund for my son to go to college. I estimate that he will need TL 50,000 by the time he is old enough to go to college. I found an account that pays 5.75% compounded monthly.

a)How much will my monthly payment be to get my son set up for college in 17 years?(15 points)

b)How much interest will the account accrue? Draw time line (Assume that the payments will be made at the ending of each month) (10 points)

4.Periodic net cash flows of A project and B project are presented below. Investment expenditures of A & B project are shown as negative.