Answered: Find the discount interest rate if…

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Finance

Find the discount interest rate if Php15,000 is the present value of Php20,000 which is due at the end of 7 months.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 45P

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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.

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Find the discount interest rate if Php15,000 is the present value of Php20,000 which is due at the end of 7 months.

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