Bonds and Present Value

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timer Asked: May 8th, 2017
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Question Description

Directions: Answer the following questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link above.

A. You have just won the Strayer Lottery jackpot of $11,000,000. You will be paid in 26 equal annual installments beginning immediately. If you had the money now, you could invest it in an account with a quoted annual interest rate of 9% with monthly compounding of interest. What is the present value of the payments you will receive?

B. In your own words and using various bond websites, please locate one of each of the following bond ratings: AAA, BBB, CCC, and D. Please describe the differences between the bond ratings. Identify the strengths and weaknesses of each rating.

Tutor Answer

RyanTopTutor
School: Carnegie Mellon University

Attached.

Running Head: PV AND BOND RATINGS

1

Present Value of Annuity and Bond Rating Assignment
Name
Instructor
Institution
Date

PV AND BOND RATINGS

2

1. You have just won the Strayer Lottery jackpot of $11,000,000. You will be paid in
26 equal annual installments beginning immediately. If you had the money now, you
could invest it in an account with a quoted annual interest rate of 9% with monthly
compounding of interest. What is the present value of the payments you will
receive?

Rate per period= 9% per annum; adjusting the rate per month makes is 9%/12 to be 0.75% per
month.
The number of periods is given as 26 equal annual installments; the annual payments...

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Review

Anonymous
Tutor went the extra mile to help me with this essay. Citations were a bit shaky but I appreciated how well he handled APA styles and how ok he was to change them even though I didnt specify. Got a B+ which is believable and acceptable.

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