Question
Use the following tables to calculate the present value of a $432,000 5%, 5-year bond that pays $21,600 interest annually, if the market rate of
Use the following tables to calculate the present value of a $432,000 5%, 5-year bond that pays $21,600 interest annually, if the market rate of interest is 6%. Round to the nearest dollar.
Present Value of $1 at Compound Interest
| Periods | 5 % | 6 % | 7 % | 10 % |
| 1 | .95238 | .94340 | .93458 | .90909 |
| 2 | .90703 | .89000 | .87344 | .82645 |
| 3 | .86384 | .83962 | .81630 | .75132 |
| 4 | .82270 | .79209 | .76290 | .68301 |
| 5 | .78353 | .74726 | .71299 | .62092 |
| 6 | .74622 | .70496 | .66634 | .56447 |
| 7 | .71068 | .66506 | .62275 | .51316 |
| 8 | .67684 | .62741 | .58201 | .46651 |
| 9 | .64461 | .59190 | .54393 | .42410 |
| 10 | .61391 | .55840 | .50835 | .38554 |
Present Value of Annuity of $1 at Compound Interest
| Periods | 5 % | 6 % | 7 % | 10 % |
| 1 | .95238 | .94340 | .93458 | .90909 |
| 2 | 1.85941 | 1.83339 | 1.80802 | 1.73554 |
| 3 | 2.72325 | 2.67301 | 2.62432 | 2.48685 |
| 4 | 3.54595 | 3.46511 | 3.38721 | 3.16987 |
| 5 | 4.32948 | 4.21236 | 4.10020 | 3.79079 |
| 6 | 5.07569 | 4.91732 | 4.76654 | 4.35526 |
| 7 | 5.78637 | 5.58238 | 5.38929 | 4.86842 |
| 8 | 6.46321 | 6.20979 | 5.97130 | 5.33493 |
| 9 | 7.10782 | 6.80169 | 6.51523 | 5.75902 |
| 10 | 7.72174 | 7.36009 | 7.02358 | 6.14457 |
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