- +1-530-264-8006
- info@tutorsglobe.com

Determining the bond worth today

Problem: Suppose a State of Maryland bond will pay $1,000 eight years from now. If the going interest rate on these 8-year bonds is 5.5%, how much is the bond worth today?

You inherited an oil well that will pay you $25,000 per year for 25 years, with the first payment being made today. If you think a fair return on the well is 7.5%, how much should you ask for it if you decide to sell it?

A. $284,595

B. $299,574

C. $314,553

D. $330,281

Now Priced at $20 (50% Discount)

Recommended **(99%)**

18,76,764

Questions

Asked

21,311

Experts

9,67,568

Questions

Answered

Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!

Submit Assignment2015 © Tutors Globe. All rights reserved.

## Q : Maintenance and insurance costs

Assuming that a 12% interest rate properly reflects the time value of money in this situation and that all maintenance and insurance costs