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Answer the following questions using TIME VALUE OF MONEY FUNCTIONS in EXCEL ?. The Impact of Market Rate 1. A note from Faust Corp. will

Answer the following questions using TIME VALUE OF MONEY FUNCTIONS in EXCEL?.

The Impact of Market Rate

1. A note from Faust Corp. will mature and pay $10,000 in three years. The note pays no interest (i.e., zero-interest-bearing.) The current market interest rate for similar bond is 2%. What price is this note selling for today??

2. A note from Faust Corp. will mature and pay $10,000 in three years. The note pays no interest (i.e., zero-interest-bearing.) The current market interest rate for similar bond is 3%. What price is this note selling for today??

3. A note from Faust Corp. will mature and pay $10,000 in three years. The note pays no interest (i.e., zero-interest-bearing.) The current market interest rate for similar bond is 4%. What price is this note selling for today??

4. Given the same amount of time, higher discounting interest rates lead to ______ (higher/lower) present values.

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