Answer Happy

4. Suppose you are committed to owning a $250,000 ferrari
. If you believe your mutual fund can achieve 8% annual rate
of return and you want to buy the car in 10 years. How much
do you have to invest today?
5. You have just made your first $5,000
contribution to your retirement account. Assuming you earn
12% per year and make no additional contributions. What will
your account be worth when you retire in 40 years? What if
you wait 10 years before contributing?
6. Your company will generate $75,000 in
annual revenue each year for the next seven years from a new
information database. If the interest rate is 3%, what is the
present value of the savings?
7. If you deposit $5,000 per year for the
next 20 years into an account paying 10%, how much money will you
have in the account in 30 years? How much will you have if
you make deposits for 40 years?
8. Suppose Ford issues a bond with a par value
of $1,000 10 years to maturity and a coupon rate of 4% paid
annually. If the yield to maturity is 5%, what is the current
price of the bond?