Assume that you are nearing graduation of your MBA program and have applied for a job with a local bank. As part of the

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Assume that you are nearing graduation of your MBA program and
have applied for a job with a local bank. As part of the bank's
evaluation process, you have been asked to take an examination that
covers several financial analysis techniques. The first section of
the test addresses time value of money analysis. See how you would
do by answering the following questions. A customer of the bank,
Raj Kami, wants to deposit $100,000 in a savings account that pays
a nominal rate of 8%.
1. Raj Kami wants to know how long it will take his sum of money
to double if the growth rate per year is 8%
2. Wilson Wonders’s bonds have 10 years remaining to
maturity. Interest is paid annually, the bonds have a $1,000 par
value, and the coupon interest rate is 10%. The bonds sell at a
price of $900. What is their yield to maturity?
3. What is the present value of a perpetuity that pays $1,000
per year if the appropriate interest rate is 5%?