Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. class handout chapter q-1. a corporation has promi

class handout chapter Q-1. A corporation has promised to pay $1,000 ten years from today...

50.1K

Verified Solution

Question

Finance

image
class handout chapter Q-1. A corporation has promised to pay $1,000 ten years from today for each bond sold now. No interest will be paid on the bonds during the ten years, and the bonds are said to offer a five percent interest rate. Approximately how much should an investor pay for each bond? ICO FU = 1000 Pu- = 6% (1+.08) na 10 years 10 = $613.91 Q-2. How much more is a perpetuity of $1,000 worth than an annuity of the same amount for thirty years? Assume a 10 percent interest rate and cash flows at end of period. Fu- 1,000 i=10% n = 30 years Q-3. How much must be saved annually, beginning one year from now, in order to accumulate $1 min over the next twenty years, earning three percent annually Q-4. You will receive a four-year annuity of $5,000 per year beginning in year three (ordinary annuity beginning in year three or annuity due beginning in year four). Payments are at the end of year. If r = 3%, what is the present value of this annuity

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students