What is the present value of a security that promises to pay you $5,000 in 20 years? Assume that you earn 7% compounded semi-annually if you were to invest in other securities of equal risk.
What is the
A Mortgage company offers to lend you US$150,000; the loan calls for payments of $12,088 per year for 30 Years. What interest rate is the mortgage company charging you?
Bank A offers to pay you a lump sum of $20,000 after 5 years if you deposit $9,500 with them today. Bank B, on the other hand, says that they will pay you a lump sum of $22,000 after 5 years if you deposit $10,700 with them today. Which offer should you accept, and why?
Justincase Corporation has issued a bond that has a 10% coupon rate, payable semi-annually. The bonds mature in 7 years, have a face value of $1,000 and a yield to maturity of 12%. What is the price of the bond?
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