Using the formulas for finite geometric series:
(b) Suppose UTM issues bonds with a one-year
maturity and $1000 face value on January 1,
2019. These bonds pay quarterly coupons of $50 on April 1, 2019; July 1, 2019; October
1, 2019; and January 1, 2020. Compute the present value of this annuity in two ways:
First by using simple compounding interest to bring back each individual payment, then
confirm your answer by using the annuity formula you found in part (a). Assume an
APR of 1.3%.
Recently Asked Questions
- A teacher wishes to distribute 35 identical pieces of candy among 4 students, based on how many pages of a book they read last month, using LOWNDES' METHOD.
- A college offers tutoring in Math, English, Chemistry, and Biology. The number of students enrolled in each subject is listed below. If the college can only
- Use the secant method on the circle function (x+1)^2 + (y-2)^2 = 16 to find a positive real root. Set your initial guess to xi = 3 and xi-1 = 0.5. Approach the