How much will Hugh have to repay on July

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Q1. Hugh Curtin borrowed $33,900 on July 1, 2017. This amount plus accrued interest at 10% compounded annually is to be repaid on July 1, 2022. How much will Hugh have to repay on July 1, 2022?

(a) What is the present value of $32,600 due 11 periods from now, discounted at 8%?

(b) What is the present value of $32,600 to be received at the end of each of 7 periods, discounted at 12%?

Q2. Carla Vista Co. is about to issue $311,700 of 7-year bonds paying an 12% interest rate, with interest payable semiannually. The discount rate for such securities is 8%. How much can Carla Vista expect to receive for the sale of these bonds?

Reference no: EM132521010

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