$23,021,820.82 is the
correct answer. It is the present value of the future maturity value and the
$875,000 interest payments, discounted at 4.5%.
First calculate the
amount of each interest payment = 25000000*7%/2 = 875000<span>
<span>Calculate periodic market interest rate = 9%/2 = 4.5%</span></span>
Answer:
C
Explanation:
one it makes sense & it fits in the context of the sentence
Answer:
Price of the Bond is $868.82
Explanation:
Market Value of the bond is the present value of all cash flows of the bond. These cash flows include the coupon payment and the maturity payment of the bond. Price of the bond is calculated by following formula:
Market Value of the Bond = C/2 x [ ( 1 - ( 1 + r/2 )^-2n ) / r/2 ] + [ $1,000 / ( 1 + r/2 )^2n ]
Whereas
C = coupon payment = $110.00 (Par Value x Coupon Rate)
n = number of years = 7
r = market rate, or required yield = 14% = 0.14
P = value at maturity, or par value = $1,000
Price Value of the Bond = $110/2 x [ ( 1 - ( 1 + 14%/2 )^-2x7 ) / 14%/2 ] + [ $1,000 / ( 1 + 14%/2 )^2x7 ]
Price Value of the Bond = $55 x [ ( 1 - ( 1 + 7% )^-14 ) / 7% ] + [ $1,000 / ( 1 + 7% )^14 ]
Price of the Bond = $481.0+$387.82
Price of the Bond = $868.82
Answer:
- a. monetary policy is completely ineffective, whereas fiscal policy is highly effective.
- a. monetary policy is completely ineffective, whereas fiscal policy is highly effective.
Explanation:
When the LM curve is horizontal, a change in money supply will not impact interest rates which would make monetary supply completely ineffective because people will be able to keep borrowing regardless of the money supply level in the economy.
If the IS curve is vertical, it means that output is independent of interest rates. This would again render monetary supply completely ineffective as output will not change as a result of a change in money supply. Fiscal policy will still work however because it would lead to more output being created via the multiplier process.
Answer:
A budget is how much you can spend
Explanation:
what i mean by that is lets say you want to buy a house for 250 thousand dollars that is your budget
