An IOU agreement was made between two persons. For a face value of P100,000, it was agreed that the borrower will make 8 annual payments at a 10.50% interest rate. The first payment will be due at the end of the year. It was also agreed that 90% of the face value will be paid for redemption. What is the bond value if it yields at a rate of 12%? Please solve using ec
An IOU agreement was made between two persons. For a face value of P100,000, it was agreed that the borrower will make 8 annual payments at a 10.50% interest rate. The first payment will be due at the end of the year. It was also agreed that 90% of the face value will be paid for redemption. What is the bond value if it yields at a rate of 12%? Please solve using ec
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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An IOU agreement was made between two persons. For a face value of P100,000, it was agreed that the borrower
will make 8 annual payments at a 10.50% interest rate. The first payment will be due at the end of the year. It was
also agreed that 90% of the face value will be paid for redemption. What is the bond value if it yields at a rate of
12%?
Please solve using economics fomula.
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