1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
IrinaVladis [17]
3 years ago
13

Fred Salmon purchased six $1,000 bonds at 92. The bonds pay 6.5%. What was the cost of the bonds? What was the total annual inte

rest? What is the yield?
Mathematics
2 answers:
Hunter-Best [27]3 years ago
4 0
What is the cost of the bond?
When you see that a bond was purchased "at 92", this means that the bond was purchased for 92% of the face value. Sometimes the bond purchaser will pay more than the face value (purchased a number greater than 100), generally if the interest rate is higher than the market rate. 

The cost of one bond, then, is 92% of 1,000, or $920.
Since there are 6 bonds, the total cost is 920 x 6 = $5520

What is the total annual interest?
The annual interest is the interest rate on the bond times the face value (not the cost of the bond).
The interest rate is 6.5%, so the annual interest on one bond is:
6.5% x 1000 = $65
6 bonds: $65 x 6 = $390

When we think of yield, we want to consider the real return on the bond. This is the annual interest earned divided by what the purchaser paid for it.
The purchaser paid $5520 for the bonds, and is earning $390.
390 ÷ 5520 = 7.06%.
Note that we can also calculate the return on one bond, rather than the total cost and interest of 6 bonds, and get the same result.
65 ÷ 920 = 7.06%
Phoenix [80]3 years ago
4 0

Answer:

Cost:$ 920 each or $5,520

Total annual interest: $65 per bond and $390 total

Yield: 7.06%

Step-by-step explanation:

The cost of the bonds is given by the multiplication of the value of the bonds by 92 and divided by 100:

1000*92/100=920

So the cost of each bond would be $920

Then the interest that is payed by the bonds is based on its value which is $1000, so he receives 65 dollars per bond a year, that multiplied by the 6 bonds is equal to $390.

The yield is the real money paid to return interest rate relation, so you just have to take the percentage if 5,520 is the 100, how much is $390=

5520/100=390/x

x=39000/5520=7.06%

You might be interested in
Which of the following sets of ordered pairs does not represent a function?
Annette [7]

Answer:

b does ot represent a function

Step-by-step explanation:

6 0
3 years ago
A jewelry store marks up the price of its jewelry up 50%. What will be the selling price of an item that the store purchased for
snow_tiger [21]

Answer: $142.5

Step-by-step explanation: If the price is being marked up by 50%, you take 50% or half of the original price of $95, which is 47.5, and add it to your original price.

95 + 47.5 = 142.5

3 0
3 years ago
Prime factorization of 212
Montano1993 [528]
212= 2 X 2 X 53
212= 4X 53
6 0
3 years ago
Simplify the expression by using a double-angle formula. 2 cos^2 4 theta -1
avanturin [10]
You are given 2cos² (4θ - 1). You are asked to s<span>implify the expression by using a double-angle formula. 

Apply the double angle of the cosine function
</span>cos2θ = 2cos² θ - 1

Rearranging the expression and then substituting them
2cos² θ = cos2θ + 1
2cos² (4θ - 1) = cos 2(4θ - 1) + 1
cos2(4θ - 1) + 1

3 0
3 years ago
An apartment building produces $4,000 per quarter in gross rents. The maintenance expenses run $350 per month. Property taxes ar
S_A_V [24]

Answer:

0.16%

Step-by-step explanation:

Cost of rent per quarter = $4000

Cost of rent per year = 4×$4000

= $16,000

This means that the apartment building produces $12,000 per year in gross rents.

Yearly Expenses are as follows;

Maintenance expenses per year = 12×$350 = $4200

Property taxes per year = $1,750

Mortgage payment per year = 12×$650 = $7800

Total expenses per year = sum of all the yearly expenses

= $4200+$1,750+$7800

= $13750

Yearly revenue generated = Cost of rent per year - total yearly expenses

= $16,000-$13750

= $2250 (net operating income)

Capitalization rate is given as the ratio of the net operating income to the market value of the building.

Capitalization rate = net operating income/market value of building

Since the building with $83750, that will be its market value

Cap rate = $13750/$83750

Cap rate = 0.16%

5 0
3 years ago
Other questions:
  • Please help me out if possible.
    11·1 answer
  • The Quadratic Formula gives which roots for the equation 2x2 + 7x = -2?
    14·1 answer
  • What is the solution to the equation (8x-7) = 2(4x+9)
    14·2 answers
  • Which anwser is equal to i^39?​
    5·1 answer
  • &gt; Reflect the shape A in the 3-axis.
    7·1 answer
  • Anyone understand this?
    14·1 answer
  • The mean is affected by outliers
    13·1 answer
  • Four time two times the number is as thrice more the number​
    6·1 answer
  • 3. A regular pentagon has a perimeter of 10x + 15. What is the length of che side?
    15·1 answer
  • Heyy how do I solve this
    6·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!