There are several key types of time value of money (TVM) problems. The types include lump sum present value problems, lump sum future value problems, perpetuities, and annuities as well as combinations of the above type problems. Example of an annuity problem: What is the present value (i.e. its current price) of a 5-year ordinary annuity paid by an insurance company with annual payments of $158, evaluated at a 3 percent interest rate?

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To calculate the current yield of the bond we need to ... View the full answer