A creditor provides a company with $100,000 cash by purchasing bonds at the end of Year...
A creditor provides a company with $100,000 cash by purchasing bonds at the end of Year 1. The creditor receives $6,000 in interest from the company during Year 2. The creditor sells the bonds at the end of Year 2 or $102,000. What was the rate of return generated by this investment? (Round the percentage to the nearest whole number.)
Homework Answers
| Rate of return | = | (C+(P1-P0))/P0 | Where, | |||
| = | (6000+(102000-100000))/100000 | C | = | $ 6,000 | ||
| = | 8% | P0 | = | $ 1,00,000 | ||
| P1 | = | $ 1,02,000 | ||||
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A creditor provides a company with $100,000 cash by purchasing
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A creditor provides a company with $100,000 cash by purchasing bonds at the end of Year...
A creditor provides a company with $100,000 cash by purchasing bonds at the end of Year 1. The creditor receives $6,000 in interest from the company during Year 2. The creditor sells the bonds at the end of Year 2 or $102,000. What was the rate of return generated by this investment? (Round the percentage to the nearest whole number.)
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