A bond with a face value of $6,000 pays quarterly interest of 1.5 percent each period. Thirty-four interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 8 percent compounded quarterly on your money? Click the icon to view the table of compound interest factors for discrete compounding periods when i = 2%. You should pay $ (Round to the nearest cent as needed.)

A bond with a face value of $6,000 pays quarterly interest of 1.5 percent each period. Thirty-four interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 8 percent compounded quarterly on your money? Click the icon to view the table of compound interest factors for discrete compounding periods when i = 2%. You should pay $ (Round to the nearest cent as needed.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Question 4 of 6 Calculate the amount of money Jessica had to deposit in an investment fund growing at an interest rate of 4.00% compounded annually, to provide her daughter with $14,000 at the end of every year, for 3 years, throughout undergraduate studies. Round to the nearest cent
Eileen buys a perpetuity-immediate with annual payments for a purchase price of X. The first payment is 1.02, the 2nd payment is 3% greater than the first, the third payment is 2% greater than the second, and so on, with the increase in future payments alternating between 3% and 2%. At the purchase price of X, Eileen's effective annual interest yield rate is 3%. Determine X. Hint: I thought of the even-year payments and odd-year payments separately. (a) 102 (b) 103 (c) 204 (d) 205 Answer: (e) 206
2
Find the present value of $750 to be paid four years from now when the prevailing interest rate is 10 percent, if interest is compounded annually.
Problem 2: You were entitled to receive $5,000 at the end of six months for the rest of your life. If the interest rate is 10% compounded monthly, what is the present value of perpetuity? *Please show your correct and complete solution to the problem. Thank you!
Please use a Timeline, a physical one
Find the present value of $750 to be paid four years from now when the prevailing interest rate is 10 percent, if interest is compounded annually.
Suppose a man purchases a luxury car with an initial down payment of $20,000 and then makes quarterly payments: $2000 at the each of each quarter for six years and $3500 at the end of each quarter for eight more years. Given an interest rate of 6% compounded quarterly, find the present value of the payments and the list price of the luxury car.
4. Which of the following alternatives would you choose, assuming an interest rate of 10% compounded annually? Alternative 1: Receive $100 today. Alternative 2: Receive $120 two years from now. Alternative 3: Receive $170 five years from now.
Compare the interest earned by $9,000 for six years at 7% simple interest with interest earned by the same amount for six years at 7% compounded annually. Why does a difference occur? The simple interest earned is $ ?