Getting Maximum Results with Minimum Efforts.
Answer:
Bond Price = $1294.65063 rounded off to $1294.65
Explanation:
To calculate the price of the bond today, we will use the formula for the price of the bond. Assuming the bond is an annual bond, the coupon payment, number of periods and annual YTM will be,
Coupon Payment (C) = 1000 * 0.08 = 80
Total periods (n) = 18
r or YTM = 0.054 or 5.4%
The formula to calculate the price of the bonds today is attached.
Bond Price = 80 * [( 1 - (1+0.054)^-18) / 0.054] + 1000 / (1+0.054)^18
Bond Price = $1294.65063 rounded off to $1294.65
The overall system<span> of </span>taxation<span> in the </span>United States<span> is progressive. </span>
Answer:
$200 billion
Explanation:
Okun's law (or rule of thumb) states that for every 1% point drop in unemployment, the total output of the economy will increase by two percent.
In this case, since unemployment varies by 1% (= 5.5% - 4.5%), that would mean that the potential GDP differs in $200 billion (= $10 trillion x 2%) depending on which economist's unemployment estimation we use.