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unit 5 Distinguished Scholar Brenda Russell

# unit 5 Distinguished Scholar Brenda Russell - Unit 5 DS...

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Unit 5 DS Solutions MT 217 You purchased a \$1,000 five percent coupon bond that matures in 10 years.  How much would your bond be worth if interest rates fall to 4% the day after you  purchase the bond? What would the bond be worth in one year if interest rates fell to FV PMT n i PV First part 1000 50 10 0.04 (\$1,081.11) negative be Part Two 1000 50 9 0.04 (\$1,074.35) negative be Take a look at the Excel formulas in the CELL for the values in RED … see how we go I used the Excel formula for PV PV(rate,nper,pmt,fv,type) Rate is the interest rate per period. For example, if you obtain an automobile loan at a 10 percent annual in Nper is the total number of payment periods in an annuity. For example, if you get a four-year car loan and Pmt is the payment made each period and cannot change over the life of the annuity. Typically, pmt include Fv is the future value, or a cash balance you want to attain after the last payment is made. If fv is omitted, i Type is the number 0 or 1 and indicates when payments are due. Set type equal to

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unit 5 Distinguished Scholar Brenda Russell - Unit 5 DS...

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