Ch . 6 : Questions 2 & 20 ( Questions and Problems section )
2 . Present Value and Multiple Cash Flows [ LO1 ] Investment X offers to pay you $ 4,700 per year for eight years , whereas Investment Y offers to pay you $ 6,700 per year for five years . Which of these cash flow streams has the higher present value if the discount rate is 5 percent ? If the discount rate is 15 percent ?
20 . Calculating Loan Payments [ LO2 , 4 ] You want to buy a new sports coupe for $ 79,500 , and the finance office at the dealership has quoted you an APR of 5.8 percent for a 60-month loan to buy the car . What will your monthly payments be ? What is the effective annual rate on this loan ?
• Ch . 7 : Questions 3 & 11 ( Questions and Problems section )
3 . Valuing Bonds [ LO2 ] Even though most corporate bonds in the United States make coupon payments semiannually , bonds issued elsewhere often have annual coupon payments . Suppose