Problem Day Bonds 10.19.2011-clean

Problem Day Bonds 10.19.2011-clean - Problem Day Bonds...

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Unformatted text preview: Problem Day: Bonds Housekeeping Items • POW – Duration Exercise due Thurs by 5pm – Review Duration in the appendix of Chapter 6 – Exercise is on Blackboard under “POW Stuff” • TA Hours today 2pm – 3:30pm rm 482 • TA Hours on Thursday Today’s Agenda • Instill peace • Review Exam – #’s 15, 16, & 18 • Duration • Bonds Exam Questions Review (it’s only a test) Exam question #15 Suppose that you just welcomed a new baby girl to your family. Congratulations! You are planning to save money to pay for her college education, which will begin 18 years from today. She will attend college for 4 years. Your grandparents just gave her $10,000 as a gift and you will put this money into her savings account. The university you want your daughter to attend charges $20,000 per year in tuition (i.e., current tuition), which is payable at the beginning of each year. Assume that the tuition Exam question #15 Suppose that you just welcomed a new baby girl to your family. Congratulations! You are planning to save money to pay for her college education, which will begin 18 years from today . She will attend college for 4 years . Your grandparents just gave her $10,000 as a gift and you will put this money into her savings account. The university you want your daughter to attend charges $20,000 per year in tuition (i.e., current tuition ), which is payable at the beginning of each year . Assume that the tuition Find Future Value of Tuition Payments 1st payment is 18 years from today: Pv = -20,000 N = 18 I = 3 Pmt = 0 Fv = ?---> 34,049 2nd payment is 19 years from today: Pv = -20,000 N = 19 I = 3 Pmt = 0 Fv = ?...
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Problem Day Bonds 10.19.2011-clean - Problem Day Bonds...

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