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
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  • Kim owes Php40,000, 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)

 

  • Miles owes the following obligations: 

(a) Php50,000 due after 3 years, and 

(b) Php 75,000 due after 4 years with accumulated interest at (0.06, m = 2)

He paid Php90,000 at the end of 2 years. What single additional payment should he make at the end of 4 years to cancel his obligations if money is worth (06, m = 4) to his creditor?

 

  • Julia owes Luis Php20,000 due after 3 years and Php 30,000 due after 3 years and 6 months. She 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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