What is the present value of a security that will pay $5000 in 20 years if securities of equal risk pay 7 percent annually?

Q: With $10,000 available, you have two investment options. The first option is to buy a certificate of…

A: Bond is one of debt security which is issued by corporations or government for financing. It…

Q: Determine the present value of a financial instrument that pays $18,500 in 10 years if instruments…

A: Present Value: It refers to the real value or worth of any asset or project. It determines the fair…

Q: What is the present value of a security that will pay $14,000 in 20 years if securities of equal…

A: Present value is the value of the amount in current times that is expected to be received in future…

Q: Consider a fixed-payment security that pays P100 at the end of every year for the three years. If…

A: Per year payment = P = P100 Number of payments = N = 3  Discount rate = I = 10%

Q: What is the present value of a security that will pay the amount shown below in 20 years? Securities…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: How much should an investor pay to receive $12,000 three years (36 months) from now, assuming that…

A: RETURN 9%/12 0.75% NPER (n)  36 PMT 0 FUTURE VALUE 12000     Return= Rate

Q: What would be the price of 10 years bond with face value Rs 1000, coupon rate of 10% and required…

A: Bond is a fixed income instrument, debt instrument by investor to a borrower.

Q: What is the present value (PV) of an investment that pays $90,000 every year for four years if the…

A: The present value of an annuity is the sum of the discounted value of the periodic cash flows.…

Q: What is the present value of a security that will pay $40,000 in 20 years if securities of equal…

A: Calculate the present value as follows: Present value = Future value / (1+rate)^years

Q: What is the present value of a security that will pay $3,000 in 20 years if securities of equal risk…

A: The Formula to Calculate the Present Value  =Future Value x 1/(1 + Rate of Interest)^Period (in…

Q: Larry James is planning to invest $25,400 today in a mutual fund that will provide a return of 0.10…

A: We need to find the future value of investment of Mr.Larry James. Future value is the amount reccive…

Q: What is the present value of a security that will pay $2,000 at the end of each year for 6 years if…

A: The present value can be calculated as follows if the payments are made at the end : Calculations…

Q: An investment offers $8800 per year for 14 years with the first payment occuring one year from now.…

A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…

Q: What is the present value of a security that will pay $14,000 in 20 years if securities of equal…

A: The Present Value of a security is the present worth of an amount to be received at a future date.…

Q: I have a bond worth $ 15,000.00 with maturity in 1 year and another $ 25,000.00 with maturity in 1.5…

A: Bonds are debt securities issued by Government or other companies, who seek to raise money from…

Q: A man bought a government bond which cost P1000 and will pay P50 interest each year for 20 years.…

A: The rate of return on the bonds is the minimum required return on the investment made by the…

Q: What is the present value of a security that will pay $11200 in 16 years if securities of equal risk…

A: We need to use the concept of time value of money to solve the question. According to the concept of…

Q: What is the present value of a security that will pay 5, 000 in 20 years if securities of equal risk…

A: solution given Future value 5000 Number of years 20 Interest rate 7% Present…

Q: Suppose that a risk-free investment will make three future payments of $100 in one year, $100 in two…

A: Future values in one year, two year and three years are $100 , $100 and $100 respectively.  Rate of…

Q: What is the present value of a security that will pay $29,000 in 20 yearsif securities of equal risk…

A: Present Value is a current value of a future payment. Future cash flows are discounted at the…

Q: What is the present value of a security that will pay $5000 in 20 years if the securities of equal…

A: The present value of the cash flow is the current worth of a cash flow at a certain rate of interest…

Q: payments with 10 years to maturity. What is the dollar amount of the annual coupon payment?

A: Information Provided: Face value = $1000 Coupon rate = 9% Maturity = 10 years

Q: A $1,000 par value bond with an annual 14% coupon rate will mature in 20 years.  Coupon payments are…

A: Bonds: Bonds are a debt instrument on which interest is paid. They can be issued at a discount/par…

Q: How much will the coupon payments be of a 25-year $1,000 bond with a 5% coupon rate and quarterly…

A: Given details are : Par value of bond = $1000 Time period = 25 years Coupon rate = 5% Coupon…

Q: How much should an investor be willing to pay for an investment product that offers to pay 25,000…

A: Annuity refers to the equal amount of payments/deposits at equal intervals for a definite period at…

Q: PK Ltd issues $8 million in 5-year debentures that pay interest every 6 months at a coupon rate of…

A: Issue price of the debentures = Present value of principal + Present value of interest payments…

Q: present value of a security

A: The present value is the computations used under the concept of the time value of money, where the…

Q: A security that is selling for $3,000 and promises to pay annual interest or $250 forever would have…

A: Calculation of annual yield:Answer:The annual yield of security is 8.333%.

Q: You buy a 15-year 10 percent annual coupon bond at par value, $1,000. You sell the bond two years…

A: In this question, it is required that the Holding Period Return is calculated. Holding period return…

Q: What should the current market price be for a bond with a $1,000 face value, a 10% coupon rate paid…

A: I/Y = rate = 12% NPER = Number of years = 20 PMT = Coupon = -1000*10% = -100 FV = Future value or…

Q: An investor lends $10,000 today, to be repaid in a lump sum at the end of10 years with interest at…

A: The real rate of return of an investment is the rate of return an investment generates after taking…

Q: A 2-year Treasury security currently earns 1.94 percent. Over the next two years, the real risk-free…

A: Maturity risk premium is premium paid on the bond with high maturity bonds compared to similar bonds…

Q: What would you pay for a $100,000 debenture bond that matures in 15 years and pays $10,000 a year in…

A: Given details are: Par value of bond (FV) = $100000 Maturity period (n) = 15 years Annual Interest…

Q: 5) With an interest rate of 10 percent, the present value of a security that pays $1,100 next year…

A: Present value of security is the present value of future cash flows discounted at required rate of…

Q: What is the present value of a security that will pay $18,000 in 20 years if securities of equal…

A: Present value is the value of the money in current time that is expected to be received in future…

Q: How much is the present value of your investment if you invest P2,000 semi-annually at the start of…

A: The present value is the value of the sum received at time 0 or the current period. Given…

Q: What is the present value of a security that will pay $3,000 in 20 years if securities of equal risk…

A: Present Value: It is the present worth of the future amount and is estimated by discounting the…

Q: What is the value of this perpetuity?   5-year bond with a coupon rate of 4% has a face value of…

A: A Perpetuity is a series of payments of fixed amounts and at fixed intervals for an indefinite…

Q: How much should a $10,000 face- value, zero-coupon bond, maturing in 10 years, be sold for now if…

A: Given: Face value is $10,000 Years = 10 Interest rate = 4.5%

Q: What would be the selling price of a 10-year bond with face value of 100,000, interest at 20% which…

A: Face value = 100000 The bond pays quarterly interest Coupon = (20% of 100000) / 4 = 5000 Interest…

Q: Jaison Ltd issues $8 million in 5-year debentures that pay interest every 6 months at a coupon rate…

A: The issue price of the debenture can be calculated as present value of all payments

Q: eBook What is the present value of a security that will pay $37,000 in 20 years if securities of…

A: Discount Factor: Discount Factor is a determinant that finds out the present value of future cash…

Q: What would you pay for an investment that pays you $31000 at the end of each year for the next…

A: Note: Amount paid for the investment will be equal to the present value of amount to be received in…

Q: What is the value of a 10-year, $1,000 par value bond with a 10 percent annual coupon if its…

A: The value of a bond is the present value of the expected cash flows.

Q: What is the present value of a security that will pay $17,000 in 20 years if securities of equal…

A: Present value of a single sum can be calculated by using this equation Present value =Future…

Q: What is the present value of a security that promises to pay you $5,000 in 20 years? Assume that you…

A: It is based on the concept of time value of money. A dollar today is worth ore than a dollar after a…

Q: What is the future value (FV) of $50,000 in six years, assuming the interest rate is 4% per year? A.…

A: The value of amount available at current date on the specific date in future when invested at…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.