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Please I need the answers for all these questions 1. An individual took a financial risk and make an investment in bonds, provided that he
Please I need the answers for all these questions
1. An individual took a financial risk and make an investment in bonds, provided that he can realize 10% per year on his investment. How much can he afford to pay for a16,000 KD bond (face value) that pays 2% interest annually and will mature in 10 years? 2. How much can be paid for a 14,000 KD, 16% bond with interest paid quarterly, if the bond matures 5 years hence? Assume the purchaser will be satisfied with 4% interest compounded quarterly, since the bonds were issued by a very stable and solvent company 3. Fatima decided to make a small project. She has borrowed 100,000 KD from a bank. The interest rate is fixed at 18% compounded monthly over the 25-year life of the loan Find the remaining balance on the loan immediately after the payments listed. Also, find the amount of interest that compromises the Payment 40 payments listed. A-Payment 35 . B 4. A truck was purchased 10 years ago and now sold for 4 times the original price, what would the average inflation rate per year? s. A series of ten end of year payments of S10,000 in actual dollars has been promised. If over the next 10 years the market interest rate is 12% per year and the annual inflation rate is 7%. Find the present equivalent of this series using a) Actual-dollar analysis. b) Constant- dollar analysis Step by Step Solution
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