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

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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