Homework Answers
Effective interest rate = e^0.048 - 1 = 1.049170655 - 1 = 0.049170655
Payment = 3% * 10000 = 300
Present value of bond = 300 / 0.049170655 = 6101.199 = 6101.20
Add Answer to:
A government bond is offered that pays 3% annually to the holder indefinitely. If the income received is invested at 4....
A certain perpetuity pays the holder $300 per month. If the money is invested at a rate of 4% annually (compounded cont...
A certain perpetuity pays the holder $300 per month. If the money is invested at a rate of 4% annually (compounded continuously), what is the present value of the perpetuity?
A bond that pays 9% Interest compounded annually on a $1,000 face value will mature in...
A bond that pays 9% Interest compounded annually on a $1,000 face value will mature in 16 years. The interest rate is now 11%. What should the bond's market price be? Do not round Intermediate calculations. Round PVFA and PVF values in intermediate calculations to four decimal places. Round your answer to the nearest cent.
Winnie is deciding between investing $100,000 in a state government bond (muni bond)that pays 5% interest...
Winnie is deciding between investing $100,000 in a state government bond (muni bond)that pays 5% interest compounded annually or a corporate bond that pays 6% interestcompounded annually. Winnie will be in the 24% marginal tax bracket in 2020 (assumet he bond interest will not push her into a higher marginal tax bracket). What interest rate would the corporate bond need to pay to provide the same after-taxincome as the state government bond?Note: enter your answer as a decimal rounded up...
British government 4.8% perpetuities pay £4.8 interest at the end of each year forever. Another bond,...
British government 4.8% perpetuities pay £4.8 interest at the end of each year forever. Another bond, 3.3% perpetuities, pays £3.30 a year forever. a. What is the value of 4.8% perpetuities if the long-term interest rate is 6.8%? (Round your answer to 2 decimal places.) Perpetuity value £ b. What is the value of 3.30% perpetuities? (Round your answer to 2 decimal places.) Perpetuity value £
Eight years ago, Burt Brownlee purchased a government bond that pays 6.50 percent interest. The face...
Eight years ago, Burt Brownlee purchased a government bond that pays 6.50 percent interest. The face value of the bond was $1,000. (a) What is the dollar amount of annual interest that Burt received from his bond investment each year? (Do not round intermediate calculations.Round your answer to 2 decimal places.) ts Amount of annual interest 65.00 eBook Print ferences (b) Assume that comparable bonds are now paying 6.15 percent. What is the approximate dollar price for which Burt could...
6 Consider a 7 year bond with face value $1,000 that pays an 8.4% coupon semi-annually...
6 Consider a 7 year bond with face value $1,000 that pays an 8.4% coupon semi-annually and has a yield-to-maturity of 6.9%. What is the approximate percentage change in the price of bond if interest rates in the economy are expected to increase by 0.40% per year? Submit your answer as a percentage and round to two decimal places. (Hint: What is the expected price of the bond before and after the change in interest rates?)
Carries Clothes, Inc. has four-year bond outstanding that pays $50 annually. The face value of each...
Carries Clothes, Inc. has four-year bond outstanding that pays $50 annually. The face value of each bond is $1,000, and the bond sells for $910 What the bond's coupon rate Round your answer to two decimal places. b. What the current yeld Round your answer to two decimal places, What the yeld to matur e Abendix H and A to answer the question. Round your answer to the nearest whole number
A newly issued bond pays its coupons once annually. Its coupon rate is 5.2%, its maturity...
A newly issued bond pays its coupons once annually. Its coupon rate is 5.2%, its maturity is 20 years, and its yield to maturity is 8%. a. Find the holding-period return for a 1-year investment period if the bond is selling at a yield to maturity of 7% by the end of the year. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Tax on interest income-? Tax on capital gain-? tot taxes b. If you sell...
Based on the terms of a bond, it pays a holder $62,500 three years after it...
Based on the terms of a bond, it pays a holder $62,500 three years after it is issued. The stated interest rate on this bond is 4%, which is commensurate with the market interest rate. What is the present value of this bond? Assume annual compounding. 1. $55,541 2. $55,549 3. $55,554 4. $55,559 5. $55,562 6. $55,568 7. none of the above
A newly issued bond pays its coupons once annually. Its coupon rate is 5.2%, its maturity...
A newly issued bond pays its coupons once annually. Its coupon rate is 5.2%, its maturity is 20 years, and its yield to maturity is 8%. a. Find the holding-period return for a 1-year investment period if the bond is selling at a yield to maturity of 7% by the end of the year. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. If you sell the bond after one year, what taxes will you owe...
A certain perpetuity pays the holder $300 per month. If the money is invested at a rate of 4% annually (compounded continuously), what is the present value of the perpetuity?
A bond that pays 9% Interest compounded annually on a $1,000 face value will mature in 16 years. The interest rate is now 11%. What should the bond's market price be? Do not round Intermediate calculations. Round PVFA and PVF values in intermediate calculations to four decimal places. Round your answer to the nearest cent.
Eight years ago, Burt Brownlee purchased a government bond that pays 6.50 percent interest. The face value of the bond was $1,000. (a) What is the dollar amount of annual interest that Burt received from his bond investment each year? (Do not round intermediate calculations.Round your answer to 2 decimal places.) ts Amount of annual interest 65.00 eBook Print ferences (b) Assume that comparable bonds are now paying 6.15 percent. What is the approximate dollar price for which Burt could...
6 Consider a 7 year bond with face value $1,000 that pays an 8.4% coupon semi-annually and has a yield-to-maturity of 6.9%. What is the approximate percentage change in the price of bond if interest rates in the economy are expected to increase by 0.40% per year? Submit your answer as a percentage and round to two decimal places. (Hint: What is the expected price of the bond before and after the change in interest rates?)
Carries Clothes, Inc. has four-year bond outstanding that pays $50 annually. The face value of each bond is $1,000, and the bond sells for $910 What the bond's coupon rate Round your answer to two decimal places. b. What the current yeld Round your answer to two decimal places, What the yeld to matur e Abendix H and A to answer the question. Round your answer to the nearest whole number
Most questions answered within 3 hours.
-
1 point) Given the significance level α=0.01 find the following:
(a) left-tailed z value z= (b)...
asked 1 minute from now -
Calculate the expected value, the variance, and the standard
deviation of the given random variable X....
asked 18 seconds ago -
Assume that in a hydrogen atom, the electron circles the nucleus
in a circle of radius...
asked 4 minutes ago -
Describe two obstacles that makes fixing atmospheric nitrogen
difficult.
asked 9 minutes ago -
T
F 53) Most differences
between human groups are the result of biology rather than
culture....
asked 13 minutes ago -
A 5.20 mW helium neon laser emits a visible laser beam with a
wavelength of 633...
asked 17 minutes ago -
Assignment:
Your
organization has made a strategic decision
to
outsourcework
currently performed in house. You have...
asked 15 minutes ago -
A hospital performs 100 surgeries per week. The probability that
complications after surgery occur is 10%....
asked 16 minutes ago -
In preparing its cash flow statement for the year ended December
31, 2018, Green Co. gathered...
asked 18 minutes ago -
Donna is 18 years old and full time accounting student.She is
saving for an overseas holiday...
asked 18 minutes ago -
Service-oriented architectures (SOA) provide
object-oriented architectures for web platforms that represent a
collection of services. SOA...
asked 19 minutes ago -
Le Terroir Winery is considering an expansion project to produce
fine wines. The trial expansion will...
asked 28 minutes ago