1. How much would your parents have to deposit each month into an account that grows at a rate of 10% per year compounded annually if they want to have $90,000 at the end of year 3 to cover part of your college expenses? Assume no interperiod compounding.
2. Suppose that 1 year, 2 year, 3year zero rate are respectively, 4%, 5%, 6% and 7% per annum with continuous compounding. what is the coupon rate of a three bond issued at par. Assume that the bond has just been issued and that the first annual coupon is paid in one year.
3. How much money would you have to deposit today in order to have $4,000 in three years if the discount rate is 7 percent per year? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))