need these explained fully all highlighted questions and last page
2 Rate finetion 2 5. 682/2*/1000 = 32.50 3. A $1,000 face value bond currently has a yield to maturity of 8.22 percent. The bond matures in five years and pays interest semiannually. The coupon rate is7.5 percent. What is the current price of this bond? PU furetiona FV=1000 rate=8.22% 12 N=5*2 PMT= 7.5%*1000/2 920, 96 4. New Markets has $1,000 face value bonds outstanding that pay interest semiannually, mature in 14.5 years, and have a 4.5 percent coupon. The current price is quoted at 97.6. What is the yield to maturity? FVE 1000 V = 14.5*2, PMT 4,5% 12*1000, PV=-776 vied gied nutri natrity Rob wants to invest $15,000 for 7 years. Which one of the following rates will provide him with the largest future value? A:15,000 B:18 448 E: 19731.98 6You want to invest an amount of money today and receive back twice that amount in the future. You expect to earn 6 percent interest. Approximately how long must you wait for your investment to double in value? 11.696 7. Precision Engineering invested $125,000 at 6 percent interest, compounded annually for 3 years. How much interest on interest did the company earn over this period of time? 1 125,000 I 16 N/3 PNT/O FV /148,897 Total/23887 - 123,000 23847 125oo Intal /25,000 x 6%83 1 Page 2387 & You want to invest an amount of money today and receive back twice that amount in the future. You expect to earn 5 percent interest. Approximately how long must you wait for your investment to double in value? 14.4 App, rate om 9. Which savings accounts should you choose: - APR -5.25% with daily compounding (assume 365 dy year) S.S3 - APR -5.30% with semiannual compounding. S. 32 EAR = [1+ APR" 10. Bob just retired. His portfolio is worth $1 MILLION. If he keeps it in a retirement account that earns 6.25 percent. His plan is to withdraw an equal amount from this account at the end of each year for the next 25 years and then have nothing left. How much can he withdraw each year? V PMTN - PMT =80,094.62 C.25 1. Consider a 4-year loan with monthly payments. The interest rate is 8% and the principal amount is $5000. Each payment covers the interest expense plus reduces principal. Payment Ending Beginning Balance Interes t Paid Principal Paid IN= 4x12 I = 8/12 month Balanc PV=5,000 Ev=0 A 122.06 B C PMT=122 What are the values of ABC? B = .08 xsooo (= A-13 2 Page 12. The present value of a lump sum future amount: A. increases as the interest rate decreases. B. decreases as the time period decreases. C. is inversely related to the future value. D. is directly related to the interest rate. E. is directly related to the time period. 13. All else being equal, as market interest rate increases, bond price also increases A. True B. False Differences between T-bill, T-Note, T-Bond 1. Do U.S. Treasuries have credit risk? 2. Are all three paying coupons 3. What is the differences in maturities 31P
