ASSIGNMENT
Remember, read the questions, and don’t overthink them.
You can answer all questions in excel ( including the short written answers)
- You need to buy a computer system in 3 years for $37,000. The interest rate is 5 %. How much do you set aside now to buy the system?
- You have 9,000 set aside now, and it is expected to purchase $10,000 in new equipment in 5 years. The assumed interest rate is 8.5 %. Do I have enough capital set aside to make this purchase?
- As US treasury has a semi-annual coupon of 6 %, and it matures in 15 years. The yield to maturity is 5 %.
Calculate the present value of the coupons.
Calculate the present value of the maturity value.
- Suppose you have 25 years to retire and save 8,000 per annum ( paid semi-annually in arrears) at an assumed investment rate of 7%.
What is the value of my retirement account in 25 years?
- Assume the following cash flows and calculate the IRR
-765,000 ( T0)
215,000 (T1)
25,000 (T2)
605,000 (T3)