For each problem given, find (a) the present value of the lump-sum payment, (b) the present value of the payments, and (
Posted: Wed Jul 06, 2022 12:05 pm
For each problem given, find (a) the present value of the lump-sum payment, (b) the present value of the payments, and (c) the fair market value of the bond.
Round each part of the answer to the nearest cent.
1. A company issues a 15-year $2,000 bond that pays $40 every six months. The current market interest rate is 6%.
2. A school board issues a 20-year $5,000 bond that pays $50 every six months. The current market interest rate is 4.5%.
Round each part of the answer to the nearest cent.
1. A company issues a 15-year $2,000 bond that pays $40 every six months. The current market interest rate is 6%.
2. A school board issues a 20-year $5,000 bond that pays $50 every six months. The current market interest rate is 4.5%.