Calculate the present value of the following:
1. $250,000 to be received three years from today, assuming an annual interest rate of 6%.
2. $2,500 to be received annually at the end of each of 10 periods, discounted at 8%.
3. $4,000 receivable at the end of each of the next five periods when the market rate of interest is 5%.
2. General Motors' 8.375% bonds due in 2033 were reported in The Wall Street Journal as selling for 100.245 on February 18, 2005. Were the bonds selling at a premium or at a discount on February 18, 2005? Explain.