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Solve for pv of the note

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Reference no: EM132523817

Can you solve this problem with a detailed explanation:

Suppose someone offers to sell you a commercial note that calls for a single $3750 payment, five years from today. The person offers to sell the note for $3,000. You have $3,000 in the bank that pays 4.75% APR with daily compounding; and you plan to leave the money in the bank unless you buy the note. The note is not risky. Should you buy it?

a. Solve for FV of leaving the $3,000 in the bank

b. Solve for PV of the note

c. Would you buy the note? Why?

Reference no: EM132523817

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