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15. Which of the following statements is true? a. The higher the discount rate, the higher the present value The process of accumulating interest on
15. Which of the following statements is true? a. The higher the discount rate, the higher the present value The process of accumulating interest on interest is referred to as discounting money is worth 10% compounded annually. $1,100 due one year from today is equivalent to $1.000 today o f a single surm is due on December 31, 2017, the present value of that sum decreases as the date draws dioser to December 31, 2017 10. Please use the appropriate factors from the following list to calculate your answer to this question Present Value of Future Value of Ordinary Annuity Ordinary Annuity 7 periods 5 2064 8.92280 5.7466 10.63663 9 periods 6.2489 12.48756 in early January of 2017 a company commits to deposit $12.000 annually starting at the end of December 2017 and it earns 8%, what will the balance be on December 31, 20242 Please round your answer to the nearest dollar. a $107.075 b. $115.640 c. $127 540 d $137,851 17. On January 2, 2017, Wine Corporation wishes to issue $8,000,000 (par value) of its 8%, 10- year bonds. The bonds pay interest annually on January 1. The current yield rate on such bonds is 10%. Using the interest factors below, compute the amount that Wine will realize from the sale (issuance) of the bonds. Present value of 1 at 8% for 10 periods 0.4632 Present value of 1 at 10% for 10 periods 0.3855 Present value of an ordinary annuity at 8% for 10 periods 6.7101 Present value of an ordinary annuity at 10% for 10 periods 6.1446 a. $6,000,000 b. $5,262,408 C. $8,000,036 d. $5,636,156
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