Present value​ (with changing​ years). When they are first​ born, Grandma gives each of her grandchildren a ​$3000 savings bond that matures in 18 years. For each of the following​ grandchildren, what is the present value of each savings bonds if the current discount rate is ​5.5%? a. Seth turned 14 years old today. b. Shawn turned 12 years old today. c. Sherry turned 9 years old today. d. Sheila turned 3 years old today. e. Shane was just born.

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Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.