The promissory note with a face value of 500,000 has 45 days until maturity. If the relevant yield is 7% then what is the current price of this promissory note? A promissory note with a face value of P500000 has 45 days until maturity. If therelevant yield is 7% then what is the currentprice of this promissory note? *Your answer

Promissory notes are a form or type of financial instrument in which one party makes promises to…

Answered: The promissory note with a face value…

The promissory note with a face value of 500,000 has 45 days until maturity. If the relevant yield is 7% then what is the current price of this promissory note?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: You enter in a long position in a 6x12 FRA at a LIBOR rate of 3.00% and a nominal value of $10M. (a)…

A: Solution:-The scenario in question involves holding a long position in a Forward Rate Agreement…

Q: Assume that interest rate on a 182-day, $1 million face value T-Bill is currently selling at a…

A: Given T bill Worth = $ 1 million Currently selling =…

Q: he current yield curve for treasuries is as follows: Maturity (years) YTM 1 0.5% 2 0.9% 3 1.01%…

A: A predetermined exchange rate at which payment will be made or received in the future is term as the…

Q: You are given the following information about an investment account for the year 2021: Date January…

A: The time-weighted return assists in removing the effects that money inflows and outflows have on…

Q: You buy a new 1000 face value 5 year treasury with annual payments of 10. Current yield to maturity…

A: Treasury Bills is generally a debt instrument that is issued by the government . They are less risky…

Q: Suppose the interest rate on a 3-year Treasury Note is 1.25%, and 5-year Notes are yielding a 3.50%.…

A: Answer: A 2 year treasuries will be yielding 3 years from now should be 6.97%

Q: If the interest rate is 15%, what is the present value of a security that pays you $1,100 next year,…

A: Time value of money is one of important concept being used in finance. As per this concept, a sum of…

Q: The interest rate on a GIC is 3.45% compounded semi-annually. What is the purchase price of the GIC…

A: Present value The amount of cash that must be invested in order to realize a given future objective…

Q: Find the Future value of the following deposits: P5000 two months from now, P3000 at the end of the…

A: The time value of money concept is the financial concept that deals with the time value or worth of…

Q: Suppose you made a 90-day investment with a maturity value of $18,000. Find the present value of the…

A: The maturity value is the future value. We need to determine the present value of this. For that we…

Q: Suppose the 1-year and 2-year OIS rates are 2% and 4%, respectively. Consider an OISswap with two…

A: Dear student, kindly check the answer in the explanation box below.Explanation:Dear student, below…

Q: % debenture is $1,000 with maturity is 3 years. What would be the price if yield rate is 8%? use…

A: The given problem can be solved using PV function in excel. PV function computes current price for…

Q: A K100, 000 Treasury bill currently sells at 95% of its face value and is 65 days from maturity.…

A: To calculate the discount yield, we use the following formula: Discount Yield = (Discount / Face…

Q: Calculate the percentage return on a 1-year Treasury bill with a face value of $10,000if you pay…

A: The treasury bill is issued at discount but matures at the face value. There is no interest on the…

Q: You have just bought a Government of Ghana Three Year Note. The Note has a face value of…

A: Yield to maturity (YTM) is a rate of return on fixed income securities by holding the securities…

Q: A promissory note will pay $52,000 at maturity 8 years from now. If you pay $25,000 for the note…

A: A promissory note is a written promise made by one party (the "issuer" or "maker") to pay a specific…

Q: If the interest rate is 15%, what is the present valueLOADING... of a security that pays you $1100…

A: Interest Rate = r = 15%Payment for year 1 = p1 = $1100Payment for year 2 = p2 = $1230Payment for…

Q: present value of $65,000 in six years, if the relevant interest ra

A: Present value is the equivalent today of the future cash flow based on the time and interest rate of…

Q: . What to the nearest cent is the value of the long forward contract?

A: A financial agreement between two parties to purchase or sell an asset at a defined future date for…

Q: An investment will pay 13400 in five years what is the present value of this investment today if the…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: You deposit $10,000 in an account that pays 4.5% interest compounded quarterly. Use the future value…

A: Interest rate (r) = 4.5% compounded quarterly Hence, compounding frequency (k) = 4

Q: You have purchased a $1,000 Face Value, 9-month (270-day) Treasury-bill (T-bill) with a quoted…

A: Given:Face Value (FV) = $1,000Quoted Market Discount Yield (DMY) = 5.25%Number of Days to Maturity…

Q: What is the present value of a security that will pay $2,000 at the end of each year for 6 years if…

A: The present value can be calculated as follows if the payments are made at the end : Calculations…

Q: interest rate on a 3-year treasury note is 2.75%, and 6-year notes are yielding 3.50%. Based on the…

A: According to the expectation theory short term interest would be on the basis of long term interest…

Q: What would be the money market yield earned at maturity of a six month bill issued at a discount…

A: Assuming a value of $1000

Q: What is the present value of $200 per year, at a discount rate of 18.25 percent, if the first…

A: Annuity Amount is $200 Discount Rate (r) is 18.25% First Payment is received is 6 years from now…

Q: You purchase a three-month discount security (e.g., a Treasury bill or commercial paper) for $0.9878…

A: Purchase price of 3-month discount security = $98780 Face Value = $100,000

Q: Calculate yields on 3-month T-bills the T-bills have a maturity value (1 Price (PB) of a 3-Month…

A: Tbills are issued by federal government to give liquidity and maintain liquidity in the financial…

Q: Find the present value of payments of $1000 at the end of each year for five spot rates for 1 to 5…

A: Present value is the equivalent value of the future value based on the time value of money and…

Q: What is the present value of an investment that pays you $21.96 per month for 11 months if the first…

A: To calculate the present value of an investment with monthly payments, you can use the formula for…

Q: A 60-day $100,000 T-bill was bought for $99,500. What rate of return will be realized if the T-bill…

A: Given: Face value = $100,000 Present value = $99,500 Days = 60

Q: The price of T.V set is worth 20,000.00 that needs to be paid in 20 installments of 1000.00 each. If…

A: Following is the answer to the question

Q: The current price of the underlying instrument is 1000 PLN. In a year (right after the expiry of the…

A: Spot price of Instrument = 1000 PLNInstrument rate for 1 year = r = 5%Instrument rate for half year…

Q: A 10-year floating rate (annually paid) security selling for 101.32 pays a rate based on a reference…

A: A 10-year floating rate (annually paid) security selling for 101.32 pays a rate based on a reference…

Q: the discount yield on a 3 month T-bill is 6.5%. assuming there are 360 days in a year, what is the…

A: Given: Face value = 1,000 Interest rate = 6.5% Period = 3 months or 90 days(3*30)

Q: What is the value today of $3,200 per year, at a discount rate of 10 percent, if the first payment…

A: First, we calculate the present value in year 5 of the annuity and then once again calculate the…

Q: You purchase a T-Bill which is selling at a discount of 12 TL. The maturity of this T-Bill is 255…

A: Yield represents the additional amount that a holder received for investing in financial instrument.

Q: What is the annualized investment rate % on a Treasury bill that you purchase for 9310 that will…

A: Value at the maturity (F) = 9533 Purchase price (P) = 9310 n = 91 days

Q: A 180-day $500,000 banker's acceptance (BA) is currently trading at a discount of 3.75%. You…

A: Banker's acceptance is a type of security that would pay the par value at maturity. This instrument…

Q: A 30-year security has a price of $19,759.12. The security pays $ 1,000 at the end of each of the…

A: The objective of the question is to find the annual cash flow amount between years 11 and 20 for a…

Q: What is the value today of $1,200 per year, at a discount rate of 6 percent, if the first payment is…

A: compound interest method: in compound interest, interest on interest added so it's yield the good…

Q: A 330-day T-Bill is currently selling at a discount rate of 3.97%. What will be the price of the…

A: The below expression can be used to calculate the current price of T-bill:

Q: What is the current 6 year yield

A: What is the 6 year yield (assume continuous compounding)e^(0.04*2)*e^(6 year yield*6)=e^(0.07*8)

Q: Assume a 360 day year, when a 48,000, 90 day, 8% interest bearing note payable matures, the total…

A: Total payment = Note + Interest Interest = $48,000 * 8% * 90/360 Interest = $960

Concept explainers

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.

Question

The promissory note with a face value of 500,000 has 45 days until maturity. If the relevant yield is 7% then what is the current price of this promissory note?

A promissory note with a face value of P500
000 has 45 days until maturity. If the
relevant yield is 7% then what is the current
price of this promissory note? *
Your answer

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

if the simple interest discount rate is 9.681% , what is the future value of 45,907 after 9 years and 10 months
Calculate the percentage return on a 1-year Treasury bill with a face value of $10 comma 00010,000 if you pay $9 comma 859.819,859.81 to purchase it and receive its full face value at maturity.
A promissory note with a face value of $500,000 has 45 days until maturity. If the relevant yield is 7% then what is the current price of this promissory note? Can you please give me the solution for this accompanied by an explanation? Thank you so much!
suppose the interest rate on a 3 year treasury note is 1.00% and 5 year notes are yielding 3.50% Based on the expectatiions theory, what does the market believe that 2 year treasuries will be yielding 3 years from now?
An investment promises to pay $4500 every year for 12 years. However, it does not start paying until 3 years from today. If the relevant discount rate is 6%, what is the Present Value?
Use the following 10% present value factors: N 1: 0.9091 N = 2: 0.8264 N= 3: 0.7513 Assume you wish to receive $1,000 at the end of two years. Assuming an interest rate of 10% what amount would you need to deposit todayin order to receive the S1, 000? Round to the nearest penny if necessary.
What is the maturity value of a 90-day, 12% note for $10,00?
If an investor wants to earn an annual interest rate of 10.76% on a 26 week T-bill with a maturity value of $5,000, how much should the investor pay for the bill?
Assume that you are preparing an amortization table for a three-year note with a stated and yield rate of 10% and 12%, respectively. Interest is payable every yearend. Which of the choices would be true? a. C4 - D4 = B4 b. E1 - D2 = E2 c. E3 + D3 = E4 d. B5 - D5 = C5
Assume you paid $9,700 for the 10-year T-note cited in question 12. This 10-year T-note has exactly 10-years remaining until final maturity. What is the Yield until Maturity or YTM for this 10-year T-note?