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What is the present value (PV) of $300,000 received six years from now, assuming the interest rate is 10% per year? OA. $169,342 OB. $180,000 OC. $211,678 D. $296,349

What is the present value (PV) of $300,000 received six years from now, assuming the interest rate is 10% per year? OA. $169,342 OB. $180,000 OC. $211,678 D. $296,349

Essentials Of Investments
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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K What is the present value (PV) of $300,000 received six years from now, assuming the interest rate is 10% per year? OA. $169,342 OB. $180,000 OC. $211,678 OD. $296,349
Transcribed Image Text:K What is the present value (PV) of $300,000 received six years from now, assuming the interest rate is 10% per year? OA. $169,342 OB. $180,000 OC. $211,678 OD. $296,349
← Maturity_(years)_ 1 $97.25 A. 2.89% OB. 5.78% OC. 0.11% OD. 1.44% 2 $94.53 point(s) possible 3 $91.83 GULTA 4 $89.23 Price The above table shows the price per $100 face value of several risk-free, zero-coupon bonds. What is the yield to maturity of the four-year, zero-coupon, risk-free bond shown? 5 $87.53 S u le ps S. S 4. C n, a
Transcribed Image Text:← Maturity_(years)_ 1 $97.25 A. 2.89% OB. 5.78% OC. 0.11% OD. 1.44% 2 $94.53 point(s) possible 3 $91.83 GULTA 4 $89.23 Price The above table shows the price per $100 face value of several risk-free, zero-coupon bonds. What is the yield to maturity of the four-year, zero-coupon, risk-free bond shown? 5 $87.53 S u le ps S. S 4. C n, a
Expert Solution
Step 1: Current worth:

The amount that is expected to be obtained by an investor for making any investment today will be referred as the future worth. If the amount deposited today is to be found then this future worth is discounted using the discounting rate along with the number of years given.

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