What is the present value of the future? amounts

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1. What is the present value of the following future? amounts?

a. ?$ 600 to be received 9 years from now discounted back to the present at 9 percent.

b. ?$ 400 to be received 7 years from now discounted back to the present at 9 percent.

c. ?$1,200 to be received 11 years from now discounted back to the present at 5 percent.

d. ?$1,250 to be received 4 years from now discounted back to the present at 19 percent.

2. What would you be willing to pay for a $1000 par, 7 1/2% coupon bond with 15 years until maturity if you wanted to earn a return of 8%?

$957

$985

$966

$991

3. The City of Tempe has a municipal bond outstanding with an interest rate of 3.6%. For an investor in the 25% tax bracket, what is their tax equivalent yield?

4.4%

4.6%

4.8%

4.2%

Reference no: EM131868133

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