Purpose

This assignment is intended to help you learn to explain the circumstances of borrowing or lending in light of time value of money concepts.

Overview

Toyota Motor Credit Corporation, a subsidiary of Toyota Motor, offered $$ecurities for sale on March $28,2008.$ Under the terms of the offering, Toyota Motor Credit promised to repay the owner of one these securities its face value, $$100,000,$ on March $28,2038.$ The bonds were priced at $$24,099$ and are to pay nothing until the March $2038$ maturity when they are to be redeemed for $$100,000.$ Thus, Toyota Motor Credit borrowed $$24,099$ for each bond and promised to pay back $$100,000$ thirty years later.

Action Items

By the due date indicated, create an initial post that answers the following:

Why do you think Toyota Motor Credit Corporation would be willing to accept such a small amount in $2008($$$24,099)$ in exchange for a promise to repay an amount almost four times larger $($$$100,000)$ in the future?

Would you b willing to pay $$24,099$ today in exchange for $$100,000$ thirty years from now? Justify your answers.

By Sunday, respond to one of your classmates' posts. Discuss the extent to which you agree or disagree with their thoughts. Provide rationale for your response.