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Suppose that I receive a payment of $20,000 in three years.

Paper help Economics Suppose that I receive a payment of $20,000 in three years.

Economics

Suppose that I receive a payment of $20,000 in three years.

Suppose that I receive a payment of $20,000 in three years. If interest rates are 2%, then what i… Show more a. Suppose that I receive a payment of $20,000 in three years. If interest rates are 2%, then what is the present value today of the future payment? b. A simple discount bond pays $4000 in one year. Find the yield to maturity when the price of the bond is i. $3800 ii. $3900 iii. $4000 What happens to the yield to maturity as the price of the bond increases? c. How much would investors be willing to pay for a perpetuity that that pays $2000 per year if interest rates are 5%? I would like the answers but more importantly i would really like to know how to do these problems. • Show less

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