Mildred can purchase a municlpal bond with a per(face) value of $1000 that will
ID: 2759613 • Letter: M
Question
Mildred can purchase a municlpal bond with a per(face) value of $1000 that will mature in 4 years. The bond pays annual 8% interest quarterly. If she can buy this bond for $1050, what will be the present value of the investment at a moninal annual interest rate of 4% and what can be said for the IRR of the investment? a. 97. 16, IRR 4% c. 122 6, IRR 4% The annual income from a rented house is $20, 000 The annual expenses are $5, 000. If the house can be sold for for $24S. OOO at the end of 10 years. what would be the maximum you would pay H you consider to be 4 suitable interest rate? a. $266. 235. 5 b. $395, 000 C. $304, 845. 5 d. $360, 830 3. How much should a new graduate pay In 10 equal annual payments, starting 2 years from now, in order to repay a $30, 000 loan he has received today? The Interest rate H 6% per year a. $4, 076 b. $3, 578 C. $3, 795 d. $4, 321 4. One of two mutually exclusive alternatives must be selected Alternative A costs $30. 000 now toe annual benefit of $84SO for 20 years. Alternative B costs $50, 000 now for an annual benefit o1 $14, 000 for 10 years. If your MARR is 12%, whkh one would you recommend. it any? a. Option A b. Option B c. NoneExplanation / Answer
2)use pv formuale in excel
pv(rate,nper,pmt,fv,type)
PV(5%,10,15000,245000,0)
pmt=20000-5000=$15,000
=$266,235
3)use pmt formuale in excel
PMT(6%,10,30000,0,0)
=$4076