Mang Enteng borrowed P2000.000 from a bank and promised to pay the amount for 1 year. He received only the amount of P1920 after the bank, collected an advance interest of P80.00. Determine: interest rate rate of discount difference between A&B
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2. Mang Enteng borrowed P2000.000 from a bank and promised to pay the amount for 1 year. He received only the amount of P1920 after the bank, collected an advance interest of P80.00.
Determine:
- interest rate
- rate of discount
- difference between A&B
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Solved in 4 steps
- bond valuation An investor has two nonds in her portfolio, bond C and bond Z. each bond maturres in 4 years has a face value of 1000, and has a yield to maturity of 9.6% bond C pays a 10% annual coupon, while bond Z is a zeo coupon bond . b- assuming that the yield to maturity of each bond remains at9.6% over the next 4 years, calculate the price of the bonds at each of the following years to maturity year 4,3,2,1,0 b- plot the time path of price for each bond2. The municipality of Trento has arranged to borrow P30 million in order to implement several publicprojects (flood control, drainage system, etc.). The interest rate will be 3% per year, payable at theend of each year. This P30 million debt will be retired by making principal payments of P5 million atthe end of each year. The SB Members is concerned that it will take too long to pay off this debt. Howmany years will it take to fully pay the P30 million debt and its associated interest payments? (5 pts)(Show the Cash flow diagram and your solutions).2. Assume a bond with the following characteristics: face value = $1000; maturity = 5 years; N yearly coupon payments = $100. a. If the current price of this bond is $850, state what the formula is to calculate the bond's yield to maturity and state the range of interest rates where the yield to maturity should fall b. If you purchased this bond at face value and held it for 1 year, when you resold it for $850, what is the bond's rate of return?
- N3 The retirement income payable from which of the following retirement income benefit programs is independent of the performance of any underlying investinent portlolio? A. RRSP B. CPP c. DCPP D. TFSAConsider price quotes and characteristics for two different bonds:Bond A Bond BCoupon Payment Annual AnnualMaturity 3 years 3 yearsCoupon Rate 10% 6%Yield to Maturity 10.65% 10.75%Price 98.40 88.34At the same time, you observe the spot rates for the next three years:Term Spot (Zero-Coupon) Rates1 year 5%2 years 8%3 years 11%Demonstrate whether the price for either of these bonds is consistent with the quotedspot rates. Under these conditions, recommend whether Bond A or Bond B appears tobe the better purchase.▼ Cash Flow Present Discounted Value Interest Rate is based on the notion that a dollar paid in the future is less valuable than a dollar paid today. Part 2 The present value of a loan in which $3000 is to be paid out a year from today with the interest rate equal to 3% is $.(Round your response to the neareast two decimal place) Part 3 If a loan is paid after two years, and the amount $3000 is to be paid then with a corresponding 1% interest rate, the present value of the loan is $.(Round your response to the neareast two decimal place)
- ▼ Cash Flow Present Discounted Value Interest Rate is based on the notion that a dollar paid in the future is less valuable than a dollar paid today. Part 2 The present value of a loan in which $3000 is to be paid out a year from today with the interest rate equal to 3% is $.(Round your response to the neareast two decimal place) Part 3 If a loan is paid after two years, and the amount $3000 is to be paid then with a corresponding 1% interest rate, the present value of the loan is $.(Round your response to the neareast two decimal place)! Pls answer !bartleby = 3 max questions 1. If the proceeds of P 2000 will be paid w/ P2400 at the end of 10 months, find the discount rate. 2. At certain interest rate compounded quarterly, an amount worth P8000 will be P20000 after 5 yrs. How much would it be at the end of 10 years? 3. For a deposit of $1023 at 7.8 % interest compounded continuously over 4 years, find the interest earned?Find the present worth today in real value corresponding to the cur- rent values shown below for a 4 percent ination rate and a 4 percent interest rate. a. $400 three years from now b. $400 three years ago c. $10 next year d. $350 983 in 10 years from now e. £1 one thousand years ago the answer is 292 f. $1 000 000 000 three hundred years from now
- Provide cash-flow diagram if applicable. The PH debt as of today amounts to 12 trillion. This balloons with an interest rate of 0.16% yearly. Suppose thegovernment requires every earning individual to pay the debt by 2030, how much each of us would need to paymonthly (annual payment amortized in 12 equal payments), assuming that inflation is 3%, the interest rate is 5.6%compounded daily, and we will start the payment by the end of 2022? The Philippines is estimated to have 110million people, with the work force of around 20%.1. A man borrows P2,000.00 from his friend on October 1, 2001 and promises to pay the principal and exact simple interest at 5% to discharge the debt on June 28, 2002 a. How many days will be charged with interest? b. How much does the man pay back his friend? 2. Find the present value of P2,000.00 due at the end of 8 months if the discount rate is 6%.Consider the following coupon bond issued by XYZ.inc Term: 7 yearPayment: 175Face Value: 500 Currently the prevailing risk free rate is 0.04 and the market places a risk premium on XYZ.inc bonds of 0.05 Compute the Yield to Maturity of this bond.
