A guaranteed contract entitles Jon to receive $525 at the end of every six months for the next nine years plus an additional single payment of $10,000 in nine years. If Jon sells the contract to The Corleone Finance Company now, for a price that would provide Corleone with a rate of return of 7.4% compounded semi-annually, what would that price be?
A) $14,649.75
B) $16,811.17
C) $9,408.82
D) $12,010.92
E) $19,450

Question

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The Answer of A guaranteed contract entitles Jon to receive $525 at the end of every six months for the next nine years plus an additional single payment of $10,000 in nine years. If Jon sells the contract to The Corleone Finance Company now, for a price that would provide Corleone with a rate of return of 7.4% compounded semi-annually, what would that price be?
A) $14,649.75
B) $16,811.17
C) $9,408.82
D) $12,010.92
E) $19,450

A Guaranteed Contract Entitles Jon to Receive $525 at the End