Determine the interest rate if can buy at a price

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Problem 1: Determine the present value of $ 2,500,000 that will be paid after 25 years if the discount rate were 7%.

Problem 2: Suppose the US Federal Reserve offers a bond for $ 635.20 at 8 years of maturity. You will not have to issue payments until the maturity date, at which point you will receive $ 950. Calculate the interest rate if you decide to buy it. Determine the interest rate if you can buy it at a price of $ 555.

Reference no: EM132962748

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