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One day as you were going through some old memorabilia, you discovered an old savings




1. One day as you were going through some old memorabilia, you discovered an old savings account in which you placed $100 twenty years ago. When you checked out the account, it currently had a balance of $320.71. What annual rate of interest did you earn?;6%;2. Arnold learned something very valuable as a teenager from his dad. He was told to invest $1,000 at 12% interest at age 20 and leave it alone until age 65. Arnold's dad knew that one strategy that wealthy people use is to exercise self-discipline to never touch this long-term plan. Arnold is very happy he applied his dad's advice. Approximately how long will it take Arnold's savings to grow into $2,000? 6 years;3. Your child?s orthodontist offers you two alternative payment plans. He is indifferent to which alternative you choose. The first plan requires a $4,000 immediate up-front payment. The second plan requires you to make monthly payments of $137.41, payable at the end of each month for 3 years. What nominal annual interest rate is built into the monthly payment plan?;4. A 25-year, $1,000 par value bond has an 9.5% annual coupon. The bond currently sells for $975. If the yield to maturity remains at its current rate, what will the price be 5 years from now?;5. The Pennington Corporation issued bonds on January 1, 1987. The bonds were sold at par, had 12% annual coupon, paid semi-annually, and mature on December 31, 2016.;a) What was the Yield-to-Maturity (YTM) on the date the bonds were issued?;b) What was the price on January 1, 1992, assuming interest rates have fallen to 10%?;c) Find the current yield, capital gains/losses yield and total yield on January 1, 1992?;Additional Requirements;Level of Detail: Show all work


Paper#22404 | Written in 18-Jul-2015

Price : $27