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What is the value of a bond with a face value

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1. If the annual interest rate is 6%, would you rather have: (Show steps in your calculation) $500 now $700 at the end of five years

2. If you invest $1000 in a bank paying an annual interest rate of 10% compounded annually, how long it would take to double the initial investment. (Show steps in your calculation)

3. Suppose you put $1000 into a bank account with an annual interest rate of 5%. What will be the account balance at the end of 10 years if the interest rate is compounded quarterly? Show steps in your calculations.

4. What is the value of a bond with a face value of $4000 that makes annual payments of $500 for 3 years at an annual discount rate of 6%? Show steps in your calculations.

Reference no: EM132795869

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