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decafchicken
United States20168 Posts
present value of $1, 10 periods, 12% .3220 present value of $1, 10 periods, 14% .2697 present value of annuity of $1, 10 periods, 12% 5.6502 present value of annuity of $1, 10 periods, 14% 5.2161 A. $3,339,084 B. $2,843,172 C. $3,000,000 D. $2,686,896 My accounting final is in 3 hours and this is the only one on the practice test i can't figure out ~~ Help please!    | ||
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McFly
United States116 Posts
Its a premium so the only one correct could be A right? | ||
mrmin123
Korea (South)2971 Posts
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decafchicken
United States20168 Posts
+ Show Spoiler + D I don't know how to get it though | ||
CaucasianAsian
Korea (South)11601 Posts
all i know is that since market value > what they're selling for. they sell at a discount... and if market value < what they're selling value they sell at a premium | ||
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Picture
Canada75 Posts
3m*.12=360000 Find present value annuity of interest payments using market 14%. 360000*5.2161 Find present value of principal using market interest 14%. 3m* .2697 Add them up. 2686896 | ||
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infinity21
Canada6683 Posts
On December 18 2009 07:37 Picture wrote: ops edit lol 3m*.12=360000 Find present value annuity of interest payments using market 14%. 360000*5.2161 Find present value of principal using market interest 14%. 3m* .2697 Add them up. 2686896 This. Think of the bond as future cash flow. The fair price is the PV for the future cash flows. | ||
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decafchicken
United States20168 Posts
On December 18 2009 07:37 Picture wrote: ops edit lol 3m*.12=360000 Find present value annuity of interest payments using market 14%. 360000*5.2161 Find present value of principal using market interest 14%. 3m* .2697 Add them up. 2686896 Thank you very much!!! | ||
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Picture
Canada75 Posts
np | ||
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sixghost
United States2096 Posts
On December 18 2009 07:55 Picture wrote: Damn you, this would have been the first HW thread I've ever been able help on.Just remember to use the given rate (12% here) to calculate each interest payment (thats what you get each month), but use the market rate to calculate the present value (both for principal and the interest payments) np | ||
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Cambium
United States16368 Posts
did anyone else read the topic as "Account testing help"? I thought it was an iccup related thread. | ||
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ShaperofDreams
Canada2492 Posts
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decafchicken
United States20168 Posts
On December 18 2009 10:26 ShaperofDreams wrote: Enjoy your future career as an accountant hahahaaha i would never become an accountant after taking that class. fucking hardest test of my life | ||
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