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Please workout it out on paper and please solve all questions thank you Thanks in advance Assignment (for grading) Due Date: Tuesday, December 1, 2020
Please workout it out on paper and please solve all questions thank you
Thanks in advance
Assignment (for grading) Due Date: Tuesday, December 1, 2020 10:00 pm. Late submission will not be accepted. Show complete steps along with the answers to the following problems. 1. What is the future value of $6,340 invested for 6 years at 7.5 percent compounded annually? 2. Calculate the present value of $2,600 to be received 10 years from today if the annual interest is 9.25 percent. 3. The future value of $3,500 received today and deposited in an account for four years paying semiannual interest of 8 percent is 4. Noura borrows $28,000 from MBK Bank. For a five-year loan, the bank requires annual end- of-year payments of $6,860. What is the annual interest rate on this loan? 5. Gibson plans to fund his individual retirement account, beginning today, with 20 annual deposits of $4,000, which he will continue for the next 15 years. If he can earn an annual compound rate of 8 percent on his deposits, what will be the amount in the account upon retirement? 6. You have been offered a project paying $3,200 at the beginning of each year for the next 20 years. What is the maximum amount of money you would invest in this project if you expect 6 percent rate of return to your investment? 7. In their meeting with their advisor, Mr. and Mrs. Abbas concluded that they would need $30,000 per year during their retirement years in order to live comfortably. They will retire 10 years from now and expect a 20-year retirement period. How much should Mr. and Mrs. Abbas deposit now in a bank account paying 7 percent to reach financial happiness during retirement? 8. A generous philanthropist plans to make a one-time endowment to a renowned heart research center which would provide the facility with $320.000 per year into perpetuity. The rate of interest is expected to be 7 percent for all future time periods. How large must the endowment be? 9. $1,200 is received at the beginning of year 1, $2,300 is received at the beginning of year 2, and $3,500 is received at the beginning of year 3. If these cash flows are deposited at 8 percent, their combined future value at the end of year 3 is 10. Basma is planning for her son's college education to begin Seven years from today. She estimates the yearly tuition, books, and living expenses to be $10,000 per year for a four-year degree, assuming the expenses incur only at the end of the year. How much must Basma deposit today, at an interest rate of 8 percent, for her son to be able to withdraw $10,000 per year for four years of college? 11. What is the effective annual rate (EAR) of 8.5% compounded quarterly? 12. Khaled wants to buy a house for KD 600.000 by borrowing this amount from a bank at 4% interest rate. The loan will be repaid in equal monthly payments over 30 years. Calculate the monthly payment on this home mortgage 13. Zebra Corporation has an issue of $1,000 par value bonds with a 6.5 percent coupon interest rate outstanding. The issue pays interest semiannually and has 15 years remaining to its maturity date. If bonds of similar risk are currently earning 8 percent how much will this firm's bond sell for today? 14. Nasser bought Gulf Corporation's bond five years ago, and it will mature in 10 years. The bond has a market value of $912 today. Its yield to maturity is 7.5%. What is the annual coupon Payment of this bond? 15. Marina Industries has issued a bond which has a $1,000 par value and a 9 percent annual coupon interest rate. The bond will mature in twelve years and currently sells for $1,120. Using this information, calculate the yield to maturity on the Marna Industries' bondStep by Step Solution
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