Ask Experts Questions for FREE Help !
Ask
    jam287's Avatar
    jam287 Posts: 5, Reputation: 1
    New Member
    		  
    #1

    Jan 17, 2009, 09:54 PM
    present value/future value and bonds
    I have a few questions and here are the exact wordings of the questions, and could you please show your work to help me learn how this is all done:

    1) Johnny pays $100,000 for zero-interest bonds that pay $197,382.27 6 years from today. What is the discount rate associated with the price Johnny paid? (answer in percent)

    2) Dan pays $100,000 for an annuity that pays $25,045.65 per year for 5 years starting 1 year from today. What is the discount rate associated with the price Dan paid? (answer in percent)

    3)a. Some company issues a 5 year, $10 milllion bond with a 10% stated rate (note: semi-annual interest payments). The marker rate at the time of issuance was 8%. What is the present value of the principal amount?

    b. What is the present value of interest payments?

    c. What is the market price of the bond?
    jam287's Avatar
    jam287 Posts: 5, Reputation: 1
    New Member
    		  
    #2

    Jan 17, 2009, 09:57 PM

    I see that this is probably in the wrong section and should be in the Homework section so I'll remake the topic there.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Present value and Future value [ 2 Answers ]

Please I need help to resolve this. I want to know if I am doing the correct calculations. They gave this information: Kiddy Toy Corporation needs to acquire the use of a machine to be used in its manufacturing process. The machine needed is manufactured by Lollie Corp. The machine can be...

Future and present value [ 2 Answers ]

Your rich godfather has offered you a choice of one of the three following alternatives: $10, 000 now; $2,000 a year for eight years: or $24,000 at the end of eight years. Assuming you could earn 11 percent annually, which alternative should you choose? If you could earn 12 percent annually,...

Present and future value [ 1 Answers ]

1. If you have 7.00 now and 8.10 in 3 years what is the effective annual interest rate? 2. If you have 9.00 now and 11.84 in 7 years what is the effective annual interest rate? Show how you got the formula as I am a little confused on this as my excel buttons will not work. ...

Present Value and Future Value [ 2 Answers ]

A rich godfather has offered you a choice of one of the three following alternatives: $10,000 now; $2,000 a year for eight years; or $24,000 at the end of eight years. Assuming you could earn 11 percent annually, which alternative should you choose? If you could earn 12 percent annually, would you...

View more questions Search