4. A company is planning to set aside money to repay $100 million in bonds that will be coming due in 10 years. If the appropriate discount rate is 9%,
a. how much money would the company need to set aside at the end of each year for the next 10 years to be able to repay the bonds when they come due?
b. how would your answer change if the money were set aside at the beginning of each year? 

You are planning to buy a car worth $30,000. Which of the two 5-year deals described below 

would you choose? Explain. 

The dealer offers to take 10% off the price, and lend you the balance at the regular financing

rate (which is an annual percentage rate of 9%) 

The dealer offers to lend you $30,000 (with no discount) at a special financing rate of 3%

 

Answer rating: 100% (QA)

a To calculate the amount of money that the company would need to set aside at the end of each year for the next 10 years to repay the 100 million bon... View the full answer