Relationship between present value and interest rate

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a) State the relationship between present value and interest rate.

b) A bond pays $1,500 at the end of each year for five years, plus an additional $2,000 when the bond matures at the end of five years. What is the most you would be willing to pay for this bond if your opportunity cost of funds is 5 percent?

Reference no: EM133046105

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