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Marizza181 [45]
3 years ago
9

Mr. Alvarez's simple interest savings account currently has a balance of $12,500. He earns 6% Interest annually. Calculate his b

alance for one year
If no additional deposits are made,
A $13,250.00
B $12,506.00
C $13,500
D $12,560.00
Business
1 answer:
nata0808 [166]3 years ago
4 0

Answer:

A $13,250.00

Explanation:

The formula for calculating balance at the end of a period using simple interest is as below.

A = P(1+rt)

A =  final amount

 P=  principal amount which is $12500

 r=  interest rate 6% or 0.06

t =  time which is 1 year

A = $12,500(1+0.06 x 1)

A = $12500 x1.06 x 1

=$12500 x 1.06

=$13,250

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3 years ago
A bond par value is $1,000 and the coupon rate is 4.3 percent. The bond price was $945.46 at the beginning of the year and $976.
Snezhnost [94]

Answer:

The bond's real return for the year was 5.49%

Explanation:

In order to calculate the bond's real return for the year we would have to calculate the following formula:

bond's real return for the year=(1+Nominal rate of return)/(1+Inflation) -1

According to the given data Inflation=2.2 percent

To calculate the Nominal rate of return we would have to calculate the following:

Nominal rate of return=(Selling price + Interest coupon - Purchase price)/Purchase price

According to the given data:

Selling price=$976.26

Interest coupon=$43

Purchase price=$945.46

Therefore, Nominal rate of return=($976.26 + $43 - $945.46)/ $945.46

Nominal rate of return=7.81%

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The bond's real return for the year was 5.49%

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