11) Find the proceeds of a 5 year non-interest bearing note for $6500 discounted 2.5 years...

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11) Find the proceeds of a 5 year non-interest bearing note for $6500 discounted 2.5 years...

11) Find the proceeds of a 5 year non-interest bearing note for $6500 discounted 2.5 years before maturity if money earns 6% p.a. compounded quarterly.

business economics

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Answer 1

Answer #1

I = 6% / 4 = 1.5% per quarter

t = 2.5 yrs = 2.5 * 4 = 10 quarters

P = F / (1+I)^t = 6500 / (1+0.015)^10

= 6500 / (1.015)^10

= 5600.83

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Answer 2

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