Problem 1: What is the future value for $1000 compounded annually using each of variable below?
Number of years Interest Rate
5 3.0%
15 12.0%
7 5.0%
Problem 2: What is the present value of the following amounts?
Amount to be received in (n) years Discount rate
$10,000 5 10.0%
$1,000 3 5.0%
$20,000 20 8.0%
Problem 3: How much do you need to invest now in order to have 2.0 million at the end of 30 years if the interest rate is 10%.
Problem 4: You found a valuable oil painting in your attic. You have recived two bids for the painting. One bid is for $1.0 million and the second bid is for $2.0 million. But you will have to wait 5 years to receive the money. Your investment advisor has informed you that you can earn 12% interest on the $1.0 million if you choosen which is better?
Problem 5: What is the market price of the following boands?
Face amount = $1000
Coupon rate= 6.00%
Market rate of the similar boands = 10.00%
Bond maturity date = December 31,2009
Assume the today’s date is jan 1, 2007
Problem 6: Prepare a loan amortization schedule for a auto loan of $18,000 , 8% 60 months loan. Show only the first year make sure your schedule includes the balance of the loan at the end of the year.