Calculating Present Value by Interest Rate

When all bonds are perpetuities which annually pay $1000 (the sum of one thousand and 00/100 dollars) per annum, at an interest rate of 10 percent, the price of these bonds is: (1) $4000. (2) $5000. (3) $6250. (4) $8000. (5) $10,000.

Can anybody suggest me the proper explanation for given problem regarding Economics generally?

View Complete Question

Related Questions in Microeconomics

Q : Bonds and Interest Rates in Long-Term

When the interest rate increases, in that case the price of a long-term bond: (w) rises faster than a perpetuity bond. (x) falls. (y) does not change. (z) appreciates relatively less than a short term bond. Hello g

Q : Excess demand for commodity When do we

When do we state that there is an excess demand for a commodity in the market?

Q : Setting a price in profit-maximizing

This profit-maximizing firm as in demonstrated figure will set a price where: (1) P > MC = MR. (2) MR > MC = P. (3) MR = P > MC. (4) MR = P > MC. (5) P < MC < MR.

Q : Percentage change in the real price

Table describe the average retail price of milk and the Consumer Price Index during 1980 to 1998. Determine percentage change in the real price (1980 dollars) from 1990 to 1995?

Q : Entrepreneurs explicit costs The

The entrepreneur’s explicit costs would comprise: (1) Forgone interest on owner’s savings. (2) Value of entrepreneur’s labor. (3) Interest payments on the business loans. (4) Lost salaries from the entrepreneur’s preceding job.

Q : Zero economic profits in long-run

In long-run equilibrium, a monopolistically competitive firm is making: (a) economic profits. (b) zero economic profits. (c) negative economic profits. (d) revenues that exceed total costs. Can anybody suggest me t

Q : Price of a share of corporate stock

When the price of a share of corporate stock increases, all else identical, there will be reduces in the: (w) overall liquidity of a portfolio which includes the stock. (x) likelihood that the individual who owns the stock will sell this. (y) ra

Q : Problem on Monopsony I have a problem

I have a problem in economics on Monopsony. Please help me in the following question. The monopsonist is a price: (1) Taker as a buyer. (2) Taker as a seller. (3) Maker as the seller. (4) Maker as the buyer. Choose

Q : Employed Currency in 1700s In 1700s

In 1700s what currency was employed?

Q : Long-run supply curve in constant cost

When cranberries are a constant cost industry and that firm is typical, in that case the industry’s long-run supply curve is curve as: (i) curve A. (ii) curve B. (iii) curve C. (iv) curve D. (v) curve E.

Discover Q & A

Leading Solution Library

Avail More Than 1426839 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads

No hassle, Instant Access

Start Discovering

18,76,764

1953608
Asked

3,689

Active Tutors

1426839

Questions
Answered

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

Submit Assignment