1. Your friend just bought a new car for $32,027. You expect that the value of the car will decline by 5 percent every year. What will be the value of the car in 11 years?
2. Your neighbor has gotten into some serious credit card debt, and currently owes $16,341 with an interest rate of 14% APR. Making the minimum payment of $489 per month, how long will it take to pay off this loan? Enter answer in months, to two decimal places.
3. The Boston Clothing Co. has $1,000 face value bond outstanding with a market price of $959. The bond pays interest annually, matures in 10 years, and has a yield to maturity of 7.5 percent. What is the coupon rate? (Enter rate in percents, accurate to two decimal places.)
4. GDebi, Inc. plans to issue 4.4 percent coupon bonds, with annual coupon frequency, 8 years to maturity and $1000 face value. If the prevailing market yield on bonds of similar riskiness and maturity is 9.6 percent, what would be the market price of GDebi's bonds?
5. HexChat, Inc. has issued 16 year bonds 3 years ago. The bonds pay semiannual coupons, with a coupon rate of 4.1 percent, and $1000 face value. If your required return on this investment is 7.8 percent APR, how much would you be willing to pay for this bond?