(Various Time Value of Money Situations) Using a financial calculator, solve for the unknowns in each of the following situations.
(a) Wayne Eski wishes to invest $150,000 today to ensure payments of $20,000 to his son at the end of each year for the next 15 years. At what interest rate must the $150,000 be invested? (Round the answer to two decimal points.)
(b) On June 1, 2003, Shelley Long purchases lakefront property from her neighbor, Joey Brenner, and agrees to pay the purchase price in seven payments of $16,000 each, the first payment to be payable June 1, 2004. (Assume that interest compounded at an annual rate of 7.35% is implicit in the payments.) What is the purchase price of the property?
(c) On January 1, 2003, Cooke Corporation purchased 200 of the $1,000 face value, 8% coupon, 10-year bonds of Howe Inc. The bonds mature on January 1, 2013, and pay interest annually beginning January 1, 2004. Cooke purchased the bonds to yield 10.65%. How much did Cooke pay for the bonds?