Determine the present value of the note

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Question - Green Company has accepted a note of 2,300,000. The note is due in 15 years and has an annual coupon rate of interest of 8%, paid quarterly. The treasurer of your company would like to know the present value of the note.

Determine the present value of the note assuming market interest rates for similar notes are:

1. 9%

2. 5%

Use excel to prepare a amortization schedule for the note under both scenarios using the effective interest method.

Assume that the present value of the note is 1,600,000. Calculate the annual effective interest rate for the bond. (round to four decimal points).

Reference no: EM132527829

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