Assignment
1 When does a perpetuity that was issued in 1967 expire?
2 What is the dollar amount that you will receive tomorrow, on a 2.5 %, 30 year $1000 bond that is maturing?
3 In words, describe how the Present Value of a bond is determine?
4 What is the Future Value of a 10 year, 10 %, $1000 bond purchase today?
5 Why do they refer to bond certificates as tombstones?
6 On which number factor table could you find the 2.000 of the RULE of 72?
7) What causes the PV of a lump sum to go down in value as time passes at a particular interest rate?
8) How much is the Principal Repayment of a $1000 perpetuity maturing tomorrow?
9) Where do you find the market rate on a bond certificate?
10) You are receiving $100,000 in 5 years from the U.S. Treasury, the current discount rate is zero. What is a) the Future Value and b) Present Value of this transaction?
11) Calculate the PV of a $1000 perpetuity issued in 1958 at 3 %, now that the market rate is 6%.
12) Calculate the PV of a $1000 perpetuity issued in 1932at 10% now that the market rate is 5%.
13) You are receiving $4000 in year one, $5000 in year 2, and $6,000 in year 3. Please calculate the Present Value if the market rate is 10%.
14) Sally is receiving a divorce settlement in 6 years for $250,000. What is the FV value of this settlement, if the market rate is 8%? What is the PV value of this settlement, if the market rate is 6%?
15) Calculate the PV of a $1000, 30 year bond issued in 2007, with a stated 5% interest rate, now that market interest rate is 2%?
16) What was the original FV of the bond describe in question #15? What is the FV of the bond in question #15 today?
17) How much is a $2000 investment made in 1917 worth today if it grew at 12%?
18) How much is your pension worth today, if you deposited $10,000 annually for 15 years, if it earned 20%?
19) Your company severance is 10 annual payments of $20,000. What is it worth today, if the market rate is 5%?
20) A $5,000 investment made in 1917 grew at 3% for 30 years, then at 5% for 40%, and then finally at 6 % for the remaining 30 years. What is it worth today?