Question: WEEK THREE 1. (Present value) The Kumar Corporation is planning on issuing bonds that pay no interest but can be converted into $4,000 at maturity,

WEEK THREE

1. (Present value) The Kumar Corporation is planning on issuing bonds that pay no interest but can be converted into $4,000 at maturity, 5 years from their purchase. To price these bonds competitively with other bonds of equal risk, it is determined that they should yield 15 percent, compounded annually. At what price should the Kumar Corporation sell these bonds? Kumar Corporation should sell these bonds at $. (Round to the nearest cent.) ANSWER:

2. (Spreadsheet problem) If you invest $900 in a bank in which it will earn 8 percent compounded annually, how much will your investment be worth at the end of 7 years? Use a spreadsheet to do your calculations. How much will your investment be worth at the end of 7 years? $(Round to the nearest cent.) ANSWER:

PLEASE ANSWER EACH QUESTION CORRECTLY AND FULLY!!!

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