MA373 F11 Test 2-1 - Math 373 Test 2 Fall 2011 1. Dixi...

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Math 373 Test 2 Fall 2011 1. Dixi purchases a 20 year bond with a par value of 1000. The bond pays semi-annual coupons at a rate of 5% convertible semi-annually. The bond has a redemption value of 1200. Calculate the price of the bond to yield 7% convertible semi-annually.
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2. Yi is repaying a loan with quarterly payments for the next 10 years. The first loan payment is 800. The second loan payment is 1600. The third loan payment is 2400. Each payment increases by 800 until the last payment is 32,000. The interest rate on the loan is 8% compounded quarterly. Calculate the amount of the loan.
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3. A four year loan has an annual effective interest rate of 5%. Complete the following loan amortization table. Be sure to show your work. Time Payment Interest Principal Outstanding Loan Balance 0 1 2000 2 4000 3 4000 4 8000
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4. A bond matures for 5000 at the end of 25 years. The bond has semi-annual coupons of 100. The bond sells for a premium of 400. Calculate the annual yield convertible semi-annually.
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5. An eight year continuous increasing annuity pays at a rate of
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This note was uploaded on 02/05/2012 for the course MA 373 taught by Professor Staff during the Spring '08 term at Purdue University-West Lafayette.

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MA373 F11 Test 2-1 - Math 373 Test 2 Fall 2011 1. Dixi...

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