Use the following information for the next two questions:

$On$ March $28,2008,$ Toyota Motor Credit Corporation $(TMCC),$ a subsidiary $of$ Toyota Motor, offered some

$securities$ for sale $to$ the public. Under the terms $of$ the deal, $TMCC$ promised $to$ repay the owner $of$ one $of$ these

$securities$ $$100,000on$ March $28,2038,$ but investors would receive nothing until then. Investors paid $TMCC$

$$24,099$ for each $of$ these $securities$; $so$ they gave $up$ $$24,099on$ March $28,2008,$ for the promise $ofa$ $$100,000$

payment $30$ years later.

$C4-6.$ Why would $TMCCbe$ willing $to$ accept such a small amount today $($$$24,099)in$ exchange for a promise $to$

repay about four times that amount $($$$100,000)in$ the future?

$C4-8.$ Would you $be$ willing $to$ pay $$24,099$ today $in$ exchange for $$100,000in30$ years? What would $be$ the key

considerations $in$ answering yes $orno?$ Would your answer depend $on$ who $is$ making the promise $to$ repay?

$4-3.$ For each $of$ the following, compute the present value:

$(1)$ Years $=17$; Interest rate $=9\%$; Future value $=$ $$16,832$

$(2)$ Years $=9$; Interest rate $=7\%$; Future value $=$ $$48,318$

$4-11.$ You have just received notification that you have won the $$2$ million first prize $in$ the Centennial Lottery.

However, the prize will $be$ awarded $on$ your $100th$ birthday $(assuming$ you$re$ around $to$ collect$),80$ years from now.

What $is$ the present value $of$ your windfall $if$ the appropriate discount rate $is9\mathrm{.}1$ percent?