1. Suppose you will receive $5 000 per year for four years at the beginning of each year and that your rate of interest is 10%. Calculate the present value of the annuity [4]
2. You have just been given a job whose initial salary is $200 000 per annum. The salary is paid annually at the end of each year. You anticipate that the salary will be growing at a rate of 5% p.a. until you retire after 20 years. Your required rate of return is 10%. Calculate the present value of your lifetime salary receipts. [5]

1. Assume you borrow $70 000. You are required to pay $11 396.93 per annum at the end of each year for a period of 15 years. What interest rate or cost of capital would you be paying? [5]

1. An investor bought a $1 000 par value bond on July 16, 2015, with coupon payments due on July 2 and January 2. The coupon rate is 20% (unless otherwise stated, coupon rate is always p.a.). Calculate the accrued interest as at July 16. Assume a 30/360-day count convention [6]

A $1 000, 8% redeemable preference share has 8 years left to maturity. Calculate its value if the required rate of return or YTM is 9%.