I need help with some finance problems! Help?

I'm NOT asking for answers. I don't have my book yet, so I need help finding the equations to do these problems. Thanks!








1) Zero-coupon bonds are securities that pay no current interest but are sold at a substantial discount from redemption value. The difference between purchase price and redemption value provides income to the bondholder at the time of redemption or resale. If the annual interest rate is 3% with daily compounding, what should be the price of a zero-coupon bond that will pay $10,000 eight years from now?





2) Suppose you invest $250 in an account that pays 4.5% APR compounded quarterly. After 30 months, how much is in your account?





3) You're given a choice of getting a lump sum deposit of $1200 compounded annually at an APY of 6% or 12 monthly deposits of $100 at 6% APY compounded monthly. Without doing any calculations, which option would yield more money in interest and why?|||) Zero-coupon bonds are securities that pay no current interest but are sold at a substantial discount from redemption value. The difference between purchase price and redemption value provides income to the bondholder at the time of redemption or resale. If the annual interest rate is 3% with daily compounding, what should be the price of a zero-coupon bond that will pay $10,000 eight years from now?





You would need to find the present value of $10,000 discounted back eight years at 3% compounded daily. The formula is:





PV = FV [ 1 / (1 + i)^n ]


Where:


PV = Present Value


FV = Future Value


i = Interest Rate Per Period


n = Number of Compounding Periods


PV = 10,000 [ 1 / (1 +(0.03/365))^(8 x 365)


PV = $7,866.36





2) Suppose you invest $250 in an account that pays 4.5% APR compounded quarterly. After 30 months, how much is in your account?


Use the future value formula:


FV = PV (1 + i)^n


Where:


FV = Future Value


PV = Present Value


i = Interest Rate Per Period


n = Number of Compounding Periods


FV = 250 (1 + (0.045/4))^(10) 30 months is 10 quarters


FV = $279.59





3) You're given a choice of getting a lump sum deposit of $1200 compounded annually at an APY of 6% or 12 monthly deposits of $100 at 6% APY compounded monthly. Without doing any calculations, which option would yield more money in interest and why?


The lump sum payment is best. You are collecting 6% interest on the whole amount for the whole. year. With payments, you would only collect 6% interest for the whole year on that first $100 payment.|||1) This is a Present Value problem.

Future value of 10,000, daily rate is .00822% (3% / 365), period is 2,920 (8yrs x 365).

Formula is FV / (1 + r)^, or 10,000 / 1.0000822)^2920, or 10,000 / 1.271267 = $7,866



2) This is a Future Value problem.

Present Value of 250, quarterly rate is 1.125%, period is 10 quarters.

Formula is PV (1 + r)^, or 250(1.01125)^10 = 280



3) .5% compounded monthly will earn more than 6% annually, but $100 received monthly will earn less than a lump sum of 1,200.