Consider a fixed-payment security that pays P100 at the end of every year fo the three years. If the rate of discount is 10 percent, the present value of the bond is * P24.87 O P248.69 O P294.10 P1,000

Q: Consider a fixed-payment security that pays $250 at the end of every year for eight years. If the…

A: Present value of the bonds will present value of annuity received at the end of every year for eight…

Q: Calculate the duration of the following debt security and discuss how duration changes with YTM,…

A: Duration or Macaulay duration of a bond is determined as the weighted average time in which the cash…

Q: 5. Suppose you save $19,000 per year in an ordinary annuity promising you an interest rate of i =…

A: 5. Periodic payment, P = $19,000Interest rate, r = 7.625% Number of periods, n = 35 years The future…

Q: Assume that as of today, the annualized interest rate on a three-year security is 3 percent, while…

A: Interest rate on a three-year = 3% Interest rate on a  two-year  = 2.15%

Q: Example: Suppose that a bond has a face value of P100,000and its maturity date is 10 years from now.…

A: Bonds are the debt security which is issued by the corporations or the government to arrange the…

Q: Consider a fixed-payment security that pays P100 at the end of every year for the three years. If…

A: Per year payment = P = P100 Number of payments = N = 3  Discount rate = I = 10%

Q: Use the following tables to calculate the present value of a $487,000 @ 5%, 5-year bond that pays…

A: Present Value of bond is calculated by the present value of annual interest payment and present…

Q: You are considering an investment in a 40-year security. The security will pay $25 a year at the end…

A: the present value of an annuity is discounting the cash flow of all future payments or receipts in…

Q: One-year T-bill rates are 2% currently. If interest rates are expected to go up after 3 years by 2%…

A: T-Bills are debt security which is issued for shore time period, issued by US government. It is…

Q: se the following tables to calculate the present value of a $315,000 @ 6%, 5-year bond that pays…

A: The present value of the bond is the future inflows from bonds discounted at the market rate of…

Q: If the interest rate is 15%, what is the present value of a security that pays you $1,100 next year,…

A: Time value of money is one of important concept being used in finance. As per this concept, a sum of…

Q: uppose you considering buying a 10-year bond. This bond will pay ou 1603 taka every year for the ext…

A: Price of bond will be the present value of future cash flow from the bond and that would be the…

Q: 6. An initial sum of $50,000 is invested in a bond. You will receive payments of $2,000…

A: a. Semi - Annual Interest Rate: Given: Investment amount = $50,000 Semi-Annual Interest received =…

Q: what is the payment every​ year

A: To calculate the payment at the end of each we will use below formulaAnnual payment = PV*rWherePV -…

Q: The YTM on a three year bond is 5%. What is the average expected short rate over the life of the…

A: The yield to maturity (YTM) is the percentage rate of return of a one year on a bond if the asset is…

Q: 127. Assume that for the next three years the maturity yield will stay stable. Three years from now,…

A: Please find the answer to the above question below:

Q: Use the following tables to calculate the present value of a $774,000 @ 6%, 5-year bond that pays…

A: Lets understand the basics. For calculating present value of bond, we need to use below formula. =…

Q: Calculate the value of the simple commercial discount in the following situations: Nominal value of…

A: Simple Commercial Discount - When there is some amount of money which is due in future and other…

Q: Imagine that a $10,000 ten-year bond was issued at an interest rate of 6%. You are thinking about…

A: Using excel PV function to calculate the amount you will be willing to pay for this bond.

Q: Consider a bond with a face value of $1,000. The bond's maturity is 12 years, the coupon rate is 4%…

A: The face value of the bond is $1,000.The maturity is 12 years.The coupon rate is 4% and the payments…

Q: If a bond will pay $50 interest per year into perpetuity, at what price will this bond sell when the…

A: perpetuity: It is annuity for the infinite time. present value of perpetuity formula: present value…

Q: You purchased a bond and will receive $500 every six months for the next five years. If the market…

A: Present value of annuity can be computed by using the following formula: Here,…

Q: 3. A $500 savings bond pays 6.5% compounded semiannually and matures in 7.5 years. A. What is the…

A: Bonds are the debt security which is offered or issued by the corporates or the governments to…

Q: What is the Macaulay duration of a $1 per year annuity-immediate payable for 10 years based on an…

A: Step 1:This is calculated as (1*1 / (1+0.05) + 2*1 / (1+0.05)^2 + ... + 10*1 / (1+0.05)^10) /…

Q: What is the present value of a security that will pay 5, 000 in 20 years if securities of equal risk…

A: solution given Future value 5000 Number of years 20 Interest rate 7% Present…

Q: A security pays you an annual amount of $900 for 10 years. The seller of the security requires the…

A: Hey, since there are multiple questions posted, we will answer the first question. If you want any…

Q: You have decided to buy a perpetual bond. The bond makes one payment at the end of every year…

A: To calculate the payment at the end of each we will use below formula   Annual payment = PV*r Where…

Q: The one-year interest rate over the next 10 years will be 3%, 4.5%, 7%, 7.5%, 9%, 10.5%, 13%, 14.5%,…

A: The bond valuation refers to determining the bond's current price, Yield To Maturity, Current yield,…

Q: The real risk-free rate is 3.25%, and inflation is expected to be 2.25% for the next 2 years. A…

A: We know that the treasury security yield is determined by the addition of risk-free rate, inflation…

Q: You have decided to buy a perpetual bond. The bond makes one payment at the end of every year…

A: Perpetual bonds do not have a principal payback requirement, in contrast to ordinary bonds, which…

Q: If a security currently worth $12,800 will be worth $15,573.16 five years in the future, what is the…

A: Present value is the estimation of the current value of future cash value which is likely to be…

Q: you observe that the current 1 - year treasury bill rate is 4% and estimate that it will be 4.6% in…

A: The minimum interest rate will be the addition of treasury bill rate in one year and liquidity…

Q: A bond with a par value of P5,000 and with a bond rate of 9% payable annually is sold now for…

A: Yield to maturity is the rate at which current market value is equal to the present value of cash…

Q: A 30-year security has a price of $19,759.12. The security pays $ 1,000 at the end of each of the…

A: The objective of the question is to find the annual cash flow amount between years 11 and 20 for a…

Q: Consider a fixed-payment security that pays $250 at the end of every year for eight years. If the…

A: Present value = Amount to be received annually X Present value of annuity of $ 1 at 3% for 8 years

Q: Suppose you get for free one of the following two securities: (a) an annuity that pays $10,000 at…

A: The choice between the two securities depends on the interest rate. The present value of an annuity…

Q: calculate the present value of a $375,000 @ 5%, 5-year bond that pays $18,750 interest annually, if…

A: Information provided: Face value = $375000 Time to maturity = 5-year Market interest rate = 10%…

Q: If a one-year bond with a face value of $100 (the bond pays the bearer $100 one year from now) sells…

A: Face Value of bond = $100 Selling Price today = $85 Interest in 1 year = $100-$85 = $15

Q: What is the present value of a security that will pay $18,000 in 20 years if securities of equal…

A: Present value is the value of the money in current time that is expected to be received in future…

Q: An annual payment bond has a 10% required rate of return.Interest rates are expected to decrease 71…

A: A bond is a financial debt security that is sold by large business entities or governments to raise…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.