1. Your rich uncle has just given you a high school graduation present of $900,000. The present,...
Question:
1. Your rich uncle has just given you a high school graduation present of $900,000. The present, however, is in the form of a 38-year bond with an annual interest rate of 6.7% compounded annually. The bond says that it will be worth $900,000 in 38 years. What is this gift worth at the present time? (Round your answer to the nearest cent.)
$ ______
2. Your rich aunt gives you a high school graduation present of $180,000. Her present is in the form of a 7-year bond with an annual interest rate of 6.2%. The bond says that it will be worth $180,000 in 7 years. What is this gift worth at the present time? (Round your answer to the nearest cent.)
$ ________
3. One bank advertises a nominal rate of 3.11% compounded quarterly. A second bank advertises a nominal rate of 3.03% compounded weekly. What are the effective yields? (Round your answers to two decimal places.)
First bank : ________ %
Second bank :______ %
In which bank would you deposit your money?
Fundamentals of Financial Management
ISBN: 978-1337395250
15th edition
Authors: Eugene F. Brigham, Joel F. Houston