Answer:
b. $92,561
Explanation:
Face Value = 100,000.00
Term (in years) = 10
Total no. of interest payments = 20
Market Rate = 6.0% / 2 = 3.0%
Coupon Rate = 5.0%/2 = 2.5%
Amount PV factor Present Values
PV of Face Value of $100,000 0.553675754 $55,367.58
PV of Interest payment $2,500 14.87747486 <u>$37,193.69</u>
Issue Price of Bonds <u>$92,561.26</u>
I believe its D hope this helps :)
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Answer:
The athlete with equal installments got the better deal.
Explanation:
Two athletes each sign 10-year contracts for $80 million.
In one case, we’re told that the $80 million will be paid in 10 equal installments.
In the other case, the $80 million will be paid in 10 installments, but the installments will increase by 5 percent per year.
The one with equal installments will get $8 million every year.
But the one with increasing installments will get smaller payments initially as his payments were to be increased by 5% each year.
Though the total value of both the annuities will remain the same.
Three key elements of a bond are financial instruments that outline the future payments a company promises to make in exchange for receiving a sum of money now.
A secured bond is a bond that is pledged against a specified asset. An example of a secured bond is a mortgage bond with a lien on real estate. Bonds that do not have specific collateral and instead rely on the general financial condition of the company are known as unsecured or corporate bonds.
A lease is a contractual arrangement under which one party, called the lessor makes an asset available for use by another party called the lessee based on periodic payments over an agreed period of time. A lessee pays a lessor to use an asset or property. Premium bonds are bonds that trade above par. It costs more than the face value of the bond. A bond may trade at a premium because its interest rate is higher than the market's current interest rate.
Learn more about Financial instruments here:-brainly.com/question/21662535
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