Answer:
a. $965.74
b. $939.11
Explanation:
In this question we use the Present value formula i.e shown in the attachment below:
1. Given that,
Future value = $1,000
Rate of interest = 6.5%
NPER = 4 years
PMT = $1,000 × 5.5% = $55
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after solving this, the price would be $965.74
2. Given that,
Future value = $1,000
Rate of interest = 6.5%
NPER = 8 years
PMT = $1,000 × 5.5% = $55
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after solving this, the price would be $939.11
The government can require licenses in order to start the small business. This keeps the small business accountable and the government and keep track of this.
Answer:
The answer is $126,000
Explanation:
Please find the attached file for the calculation.
Answer:
0.75163
Explanation:
So, we are given the following data or parameters or information which is going to help us in solving the question above;
=> Payment for the pension = $10,000 once a year for a 10-year period.
=> Time for the first payment = ''end of 6th year from now''.
=> Type of Pension plan for immunization = " 5-year zero-coupon bond and 20-year zero coupon bond to construct the immunization position''
=> Interest rate = 10%.
Therefore, the weight on the 5-year zero-coupon bond can be calculated as follows:
Duration = (Weight × 5) + [( 1 - weight) × 20].
=> 5b + 20 - 20b = 8.7255.
=> b = 0.75163.
Therefore, the weight on the 5-year zero-coupon bond is 0.75163.
The weight on the 20- year zero-coupon bond = 1 - 0.75163= 0.2884.
