calculate the present value of a $375,000 @ 5%, 5-year bond that pays $18,750 interest annually, if the market rate of interest is 10%. Round to the nearest dollar.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Use the following tables to calculate the present value of a $375,000 @ 5%, 5-year bond that pays $18,750 interest annually, if the market rate of interest is 10%. Round to the nearest dollar.

Present Value of $1 ¦ Present Value of Annuity of $1
Periods
5 %
6 %
7 %
10 %
¦
Periods
5 %
6 %
7 %
10 %
1
.95238
.94340
.93458
.90909
¦
1
.95238
.94340
.93458
.90909
2
.90703
.89000
.87344
.82645
¦
2
1.85941
1.83339
1.80802
1.73554
3
.86384
.83962
.81630
.75131
¦
3
2.72325
2.67301
2.62432
2.48685
4
.82270
.79209
.76290
.68301
¦
4
3.54595
3.46511
3.38721
3.16987
5
.78353
.74726
.71299
.62092
¦
5
4.32948
4.21236
4.10020
3.79079
6
.74622
.70496
.66634
.56447
¦
6
5.07569
4.91732
4.76654
4.35526
7
.71068
.66506
.62275
.51316
¦
7
5.78637
5.58238
5.38929
4.86842
8
.67684
.62741
.58201
.46651
¦
8
6.46321
6.20979
5.97130
5.33493
9
.64461
.59190
.54393
.42410
¦
9
7.10782
6.80169
6.51523
5.75902
10
.61391
.55839
.50835
.38554
¦
10
7.72173
7.36009
7.02358
6.14457
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