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Which of the following problems can be solved using the future value of a lump sum formula introduced in this class? a. Malachi owns a
Which of the following problems can be solved using the future value of a lump sum formula introduced in this class? a. Malachi owns a treasury bond that will pay $2,500 five years from now. The going interest rate on 5-year treasury bonds is 5.25%. He wishes to know how much he should agree to sell the bond today. b. Gary takes a loan that accrues at 5.5% interest, compounded quarterly. He wishes to know how much he will owe at the end of 3 years. c. Yuta is considering the purchase of a corporate bond promising to pay $1,000 five years from now. The going interest rate on 5year bonds is at 5.5%. He wishes to know how much he should pay for the bond. d. OG must repay $5000 in three years. Money is worth 16% p.a. compounded quarterly. He wishes to know how much he should pay to settle the debt today. e. Chris is setting up a college fund for her niece. He wants her to have $30,000 in 10 years. The college savings fund earns interest at a nominal rate of 4.5% convertible semi-annually. He wishes to know how much he should deposit in the fund today
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