%3Cp%20style%3D%22margin%3A%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%
ID: 2659647 • Letter: #
Question
%3Cp%20style%3D%22margin%3A%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%3B%26nbsp%3Bfont%3A%26nbsp%3B12.0px%26nbsp%3B'Times%26nbsp%3BNew%26nbsp%3BRoman'%22%26nbsp%3Bdata-mce-style%3D%22margin%3A%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%3B%26nbsp%3Bfont%3A%26nbsp%3B12.0px%26nbsp%3B'Times%26nbsp%3BNew%26nbsp%3BRoman'%3B%22%3Ea)%26nbsp%3BA%3Cspan%26nbsp%3Bstyle%3D%22font%3A%26nbsp%3B12.0px%26nbsp%3BTimes%22%26nbsp%3Bdata-mce-style%3D%22font%3A%26nbsp%3B12.0px%26nbsp%3BTimes%3B%22%3E%26nbsp%3BCorporation%26nbsp%3B%3C%2Fspan%3Eis%26nbsp%3Bissuing%26nbsp%3B10-year%26nbsp%3Bzero-coupon%26nbsp%3Bbonds.%26nbsp%3BHow%26nbsp%3Bmuch%26nbsp%3Bshould%26nbsp%3Byou%26nbsp%3Bpay%26nbsp%3Bfor%26nbsp%3Bthese%26nbsp%3Bbonds%26nbsp%3Bwith%26nbsp%3Ba%26nbsp%3Bmaturity%26nbsp%3Bvalue%26nbsp%3Bof%26nbsp%3B%24150%2C000%26nbsp%3Bif%26nbsp%3Byou%26nbsp%3Bwish%26nbsp%3Bto%26nbsp%3Bget%26nbsp%3Ba%26nbsp%3Breturn%26nbsp%3Bof%26nbsp%3B7.8%25%26nbsp%3Bcompounded%26nbsp%3Bsemiannually.%26nbsp%3B(Round%26nbsp%3Bto%26nbsp%3Bthe%26nbsp%3Bnearest%26nbsp%3Bdollar.)%3C%2Fp%3E%3Cp%26nbsp%3Bstyle%3D%22margin%3A%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%3B%26nbsp%3Bfont%3A%26nbsp%3B12.0px%26nbsp%3B'Times%26nbsp%3BNew%26nbsp%3BRoman'%22%26nbsp%3Bdata-mce-style%3D%22margin%3A%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%3B%26nbsp%3Bfont%3A%26nbsp%3B12.0px%26nbsp%3B'Times%26nbsp%3BNew%26nbsp%3BRoman'%3B%22%3E%3Cbr%3E%3C%2Fp%3E%3Cp%26nbsp%3Bstyle%3D%22margin%3A%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%3B%26nbsp%3Bfont%3A%26nbsp%3B12.0px%26nbsp%3B'Times%26nbsp%3BNew%26nbsp%3BRoman'%22%26nbsp%3Bdata-mce-style%3D%22margin%3A%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%3B%26nbsp%3Bfont%3A%26nbsp%3B12.0px%26nbsp%3B'Times%26nbsp%3BNew%26nbsp%3BRoman'%3B%22%3Eb)%26nbsp%3BIf%26nbsp%3BBrazil%26nbsp%3Bhas%26nbsp%3Ban%26nbsp%3Bannual%26nbsp%3Binflation%26nbsp%3Brate%26nbsp%3Bof%26nbsp%3B1%2C132%25%26nbsp%3Band%26nbsp%3Ban%26nbsp%3Bitem%26nbsp%3Bwill%26nbsp%3Bcost%26nbsp%3B125%2C000%26nbsp%3B%3Cspan%26nbsp%3Bstyle%3D%22font%3A%26nbsp%3B12.0px%26nbsp%3BTimes%22%26nbsp%3Bdata-mce-style%3D%22font%3A%26nbsp%3B12.0px%26nbsp%3BTimes%3B%22%3Ecruzados%26nbsp%3B%3C%2Fspan%3Ein%26nbsp%3B5%26nbsp%3Byears%2C%26nbsp%3Bwhat%26nbsp%3Bdoes%26nbsp%3Bthat%26nbsp%3Bsame%26nbsp%3Bitem%26nbsp%3Bcost%26nbsp%3Bnow%3F%3C%2Fp%3E%3Cp%26nbsp%3Bstyle%3D%22margin%3A%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%3B%26nbsp%3Bfont%3A%26nbsp%3B12.0px%26nbsp%3B'Times%26nbsp%3BNew%26nbsp%3BRoman'%22%26nbsp%3Bdata-mce-style%3D%22margin%3A%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%3B%26nbsp%3Bfont%3A%26nbsp%3B12.0px%26nbsp%3B'Times%26nbsp%3BNew%26nbsp%3BRoman'%3B%22%3E%3Cbr%3E%3C%2Fp%3E%3Cp%26nbsp%3Bstyle%3D%22margin%3A%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%3B%26nbsp%3Bfont%3A%26nbsp%3B12.0px%26nbsp%3B'Times%26nbsp%3BNew%26nbsp%3BRoman'%22%26nbsp%3Bdata-mce-style%3D%22margin%3A%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%3B%26nbsp%3Bfont%3A%26nbsp%3B12.0px%26nbsp%3B'Times%26nbsp%3BNew%26nbsp%3BRoman'%3B%22%3Ec)%26nbsp%3BHow%26nbsp%3Bmuch%26nbsp%3Bwould%26nbsp%3Bneed%26nbsp%3Bto%26nbsp%3Bbe%26nbsp%3Binvested%26nbsp%3Bat%26nbsp%3B4.25%25%26nbsp%3Bannual%26nbsp%3Bsimple%26nbsp%3Binterest%26nbsp%3Bto%26nbsp%3Bamount%26nbsp%3Bto%26nbsp%3B%246%2C510%26nbsp%3Bin%26nbsp%3B6%26nbsp%3Byears%3F%3C%2Fp%3E%3Cp%26nbsp%3Bstyle%3D%22margin%3A%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%3B%26nbsp%3Bfont%3A%26nbsp%3B12.0px%26nbsp%3B'Times%26nbsp%3BNew%26nbsp%3BRoman'%22%26nbsp%3Bdata-mce-style%3D%22margin%3A%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%3B%26nbsp%3Bfont%3A%26nbsp%3B12.0px%26nbsp%3B'Times%26nbsp%3BNew%26nbsp%3BRoman'%3B%22%3E%3Cbr%3E%3C%2Fp%3E%3Cp%26nbsp%3Bstyle%3D%22margin%3A%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%3B%26nbsp%3Bfont%3A%26nbsp%3B12.0px%26nbsp%3B'Times%26nbsp%3BNew%26nbsp%3BRoman'%22%26nbsp%3Bdata-mce-style%3D%22margin%3A%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%26nbsp%3B0.0px%3B%26nbsp%3Bfont%3A%26nbsp%3B12.0px%26nbsp%3B'Times%26nbsp%3BNew%26nbsp%3BRoman'%3B%22%3Ed)%26nbsp%3BHow%26nbsp%3Bmuch%26nbsp%3Bshould%26nbsp%3Bwe%26nbsp%3Bdeposit%26nbsp%3Bnow%26nbsp%3Binto%26nbsp%3Ban%26nbsp%3Baccount%26nbsp%3Bearning%26nbsp%3B5.6%25%26nbsp%3Binterest%26nbsp%3Bper%26nbsp%3Byear%2C%26nbsp%3Bcompounded%26nbsp%3Bmonthly%26nbsp%3Bso%26nbsp%3Bthat%26nbsp%3Bstarting%26nbsp%3Bone%26nbsp%3Bmonth%26nbsp%3Bfrom%26nbsp%3Bnow%26nbsp%3Bthe%26nbsp%3Bbank%26nbsp%3Bwill%26nbsp%3Bsend%26nbsp%3Bus%26nbsp%3Bmonthly%26nbsp%3Bpayments%26nbsp%3Bof%26nbsp%3B%24250%26nbsp%3Bfor%26nbsp%3B5%26nbsp%3Byears%3F%26nbsp%3BAt%26nbsp%3Bthe%26nbsp%3Bend%26nbsp%3Bof%26nbsp%3Bthe%26nbsp%3Bfive%26nbsp%3Byears%2C%26nbsp%3Bthe%26nbsp%3Baccount%26nbsp%3Bbalance%26nbsp%3Bshould%26nbsp%3Bbe%26nbsp%3Bdepleted%26nbsp%3Bto%26nbsp%3Bzero.%26nbsp%3B(Round%26nbsp%3Bto%26nbsp%3Bthe%26nbsp%3Bnearest%26nbsp%3Bcent.)%3C%2Fp%3EExplanation / Answer
a) A Corporation is issuing 10-year zero-coupon bonds. How much should you pay for these bonds with a maturity value of $150,000 if you wish to get a return of 7.8% compounded semiannually. (Round to the nearest dollar.)
Payment for these bond = 150000/(1+ 0.078/2)^(2*10) = $ 69,788
b) If Brazil has an annual inflation rate of 1,132% and an item will cost 125,000 cruzados in 5 years, what does that same item cost now?
Item Will Cost now = 125000/(1.01132)^5 = $ 118159.06
c) How much would need to be invested at 4.25% annual simple interest to amount to $6,510 in 6 years?
Investment Amount = 6510/(1+ 0.0425*6) = $ 5187.25
d) How much should we deposit now into an account earning 5.6% interest per year, compounded monthly so that starting one month from now the bank will send us monthly payments of $250 for 5 years? At the end of the five years, the account balance should be depleted to zero. (Round to the nearest cent.)
Fv= 0 , PMT = 250,nper = 5*12 = 60 , rate = 5.6/12 = 0.466667%
Deposit Amount = pv(rate,nper,pmt,fv)
Deposit Amount = pv(0.4666667%,60,250,0)
Deposit Amount = $ 13,056.63
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.