The appropriate annual discount rate for each part is 13% (0.13).

 

Part 1

What is the appropriate price to pay for a security that makes one payment of 10,000 in 1 year?

 

Part 2

What is the appropriate price to pay for a security that makes one payment of 10,000 in 4 years?

 

Part 3

What is the appropriate price to pay for a security that makes two payments, one payment of 5,000 in 19 months and one payment of 5,000 in 52 months?

Answer rating: 100% (QA)

Part 1 The appropriate price to pay for a security that makes one payment of 10000 in 1 year can be ... View the full answer