Professional Documents
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I. Semi-annual interest : Annual Percentage Rate and Annual Percentage Yield Computation:
Pacita Diasen Shipping Corporation (PDS) loaned P 5,000,000 from Banco De Boro. PDS pays interest
of P 200,000 every six months.
1. If BBM will issue a 5 year bond, what will be the expected nominal interest rate?
2. If BBM will issue an 8 year bond, what will be the expected nominal interest rate?
3. If BBM will issue a 10 year bond, what will be the expected nominal interest rate?
4. What is the expected Treasury bill rate in 2017?
5. What is the expected Treasury bill rate in 2018?