Southern New Hampshire university
FIN
500 Week Four Homework
Work should be done individually.Word-process
your solutions within this template and show all steps used in arriving at the
final answers. Incomplete solutions will
receive partial credit. Copy and paste all necessary data and create tables if
needed.
Problem 1
Compute the
future value of $1000 at 8% compounded annually for 5 years.
Problem 2
Compute the
present value of $1000 due after 5 years at 12%, compounded semiannually.
Problem 3
Compute the future value of a 8%, 10-year
ordinary annuity that pays $500 each year.
Problem 4
Suppose the U.S. Treasury
offers to sell you a bond for $676.84.
No payments will be made until the bond matures 8 years from now, at
which time it will be redeemed for $1,000.
What interest rate would you earn if you bought this bond at the offer
price?
Problem 5
Master Card and other
credit card issuers must by law print the Annual Percentage Rate (APR) on their
monthly statements. If the APR is stated
to be 15.00%, with interest paid monthly, what is the card’s EFF%?
