1. Bahwan Automobiles is offering free credit of OMR25000 on a new corolla car. You pay OMR3000 down and then OMR500 a month for the next 25 months. OTE Motors in Sur does not offer free credit but will give you OMR3,000 off the list price. If the rate of interest is 5% a month, which company is offering the better deal?
2. A 8-year Oman government bond with a face value of OMR1,000 pays a coupon of 8% (4% of face value every six months). The reported yield to maturity is 10% (a six- month discount rate of 5%). What is the present value of the bond?
