Seller-Financed Notes

[John Land]

What is the PV of these notes and how is it calculated?

A. $20,000, 12% interest, no monthly payments, principle and interest all due in 5 years.

B. $20,000, 8% interest, payable at $350.66 per month fully amortized over 7 years.

C. $20,000, 10% interest, payable $166.67 per month for 5 years and the unpaid principle balance due at the end.

Choose 15 percent yield as a yard stick.