Answered

Westonci.ca offers fast, accurate answers to your questions. Join our community and get the insights you need now. Connect with a community of experts ready to help you find accurate solutions to your questions quickly and efficiently. Connect with a community of professionals ready to help you find accurate solutions to your questions quickly and efficiently.

You will be paying $8,000 a year in tuition expenses at the end of the next two years. Bonds currently yield 8%. a. What is the present value and duration of your obligation

Sagot :

The present value is $14,266.12, while the duration of the obligation is 1.48 years.

How to Calculate Present Value and Duration of an Obligation

Note: See the attached photo for the calculations of both the present value and duration.

In the attached photo, note the following in the calculation of the discounting factor:

r  = Current bond yield = 8%

Also from the attached photo, we have:

Present value = Total of present value = $14,266.12

Duration of the obligation = Total of duration in year = 1.48 years

Learn more here: https://brainly.com/question/14799840.

View image amcool
We hope this information was helpful. Feel free to return anytime for more answers to your questions and concerns. We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. Keep exploring Westonci.ca for more insightful answers to your questions. We're here to help.