Question #2: Time Value of Money 1. Suppose a U.S. treasury bond will pay $2,500 five years from now. If the going interest rate on 5-year treasury bonds is 5.25%, how much is the bond worth today? 2. Ahmed has $5,000 invested in a bank that pays 4.8% annually How long will it take for her funds to triple? 3. You want to buy a new sports car 3 years from now, and you plan to save $4,200 per year, beginning one year from today. You will deposit your savings in an account that pays 5.2% interest. How much will you have just after you make the 3rd deposit, 3 years from now? 4. What's the present value of a perpetuity that pays $250 per year if the appropriate interest rate is 5%? 1 A B 1