Dave owes $40,000, due with accumulated interest at the rate (.06, m = 4) at the end of 5 years and 3 months. What is the value of this obligation two years before it is due to a man to whom money is worth (.06, m = 1)?
Dave owes $40,000, due with accumulated interest at the rate (.06, m = 4) at the end of 5 years and 3 months. What is the value of this obligation two years before it is due to a man to whom money is worth (.06, m = 1)?
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
Problem 1PS
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1.1) Dave owes $40,000, due with accumulated interest at the rate (.06, m = 4) at the end of 5 years and 3 months. What is the value of this obligation two years before it is due to a man to whom money is worth (.06, m = 1)?
1.2) Dave owes John $20,000 due after 3 years and $30,000 due after 3 years and 6 months. He intends to pay with equal amounts at the end of 2 years and 4 years. What equal payment will discharge these debts if money is worth (0.06, m = 2)?
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