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
krok68 [10]
3 years ago
6

A 10-year $1,000 bond pays a nominal rate of 9% compounded semi-annually. If the market interest rate is 12% compounded annually

and the general inflation rate is 6% per year, find the actual-and constant-dollar amounts (in time-0 dollars) of the 15th interest payment on the bond.
Business
1 answer:
skelet666 [1.2K]3 years ago
3 0

Answer:

a) actual dollar = $60

b) Constant dollar of the 15th payment = $38.710

Explanation:

Facts from the question:

The Face value of the bond = $1,000

Nominal Interest rate = 12% and it compounded annually

General inflation rate = 6%

The question: Determine the 15th interest payment on the bond.

Step 1: The coupon for the amount of semi annual payment is as follows:

Coupon= (Interest rate/ Number of compounding times in a year) x face value of the bond

= (0.12/2) x 1000

= $60 -= Actual dollar amount

Step 2: Determine the 15th payment and this will represent the middle of the 8th year or (7 1/2) year.

To calculate this=

Constant dollar amount of the 15th interest payment

= Actual dollar amount (above) / (1 + inflation rate)∧n

where n= the number of years = 7.5 years

= $60 / (1 + 0.06) ∧7.5

= $60/1.55

= $38.710

This means the constant dollar amount on that 15th payment = $38.710

You might be interested in
The weight of a candy bar in ounces is an example of
Tju [1.3M]
Weight data is your answer
6 0
3 years ago
Journalize the following transactions for the Scott company:
Orlov [11]

Answer:

Journalize the following transactions for the Scott company:

Nov 4. Received a $6,500, 90-day, 6% Note from Michael Tim's in payment of his account.

Dr Notes receivable 6,500

    Cr Accounts receivable 6,500

Dec 31. Accrued interest on the Tim's note.

Dr Interest receivable ($6,500 x 6% x 57/365) = 60.90

    Cr Interest revenue 60.90

Feb 2. Received the amount due from Tim's on his note.

Dr Cash 6,596.16

    Cr Notes receivable 6,500

    Cr Interest receivable 60.90

    Cr Interest revenue 35.26

I did all my calculation based on a 365 day calendar year. Generally banks calculate interest on a 360 day calendar year.

8 0
3 years ago
When the number of responses is important to a schedule of reinforcement, that schedule is called a ________ schedule?
Morgarella [4.7K]
<span>Ratio Schedule of Reinforcement A set NUMBER OF RESPONSES is required for reinforcement. If the ratio is 3 responses, reinforce the 3rd response. Ratio=Response</span>
6 0
3 years ago
A new company manufactures tennis rackets. The fixed expenses are $78,490 and the variable expenses are $14 per racket produced.
fomenos

The solution for the problem follows:

 

Expense = variable expenses * quantity of produced + fixed expenses

= 14q + 78,490

= 14 (3500) + 78, 490

= 49000 + 78,490

= $127, 490 is the total expense for 3,500 tennis rackets

 

Get the per piece expense by dividing 127,490 to 3500

Expense per piece = 127,490 / 3500

= $36.43

 

<span> </span>

3 0
4 years ago
Gloria is opening an upscale women's clothing store in a growing suburban residential area. Gloria knows her target market is up
kupik [55]

Answer:

The correct answer is real estate values by subdivision

Explanation:

As Gloria is not able to afford the Tapestry analysis which is a costly one, She will use the real estate values  by the subdivision. As this method is not only cost effective but is far efficient from the other less effective methods. Although Tapestry PRIZM analysis methods are effective however they are not as good a value for money as the real estate values by subdivision strategy is.

7 0
4 years ago
Other questions:
  • Who dismissed congress's plan to spend $40 billion to end the depression, saying it was impossible to "squander our way to prosp
    13·2 answers
  • Which of the following statements is CORRECT?
    12·1 answer
  • The Model Privacy notice was introduced in 2010. Which statement about the notice is true?
    12·1 answer
  • A system in which people run their businesses free from government interference is called __________.
    5·1 answer
  • A small company has 5000 shares. Lauren owns 200 of these shares. The company decides to split its shares. What is Lauren's owne
    13·2 answers
  • RATIO CALCULATIONS Assume the following relationships for the Caulder Corp.: Sales/Total assets 1.7x Return on assets (ROA) 7% R
    14·1 answer
  • A method of identifying the legal description of a property is known as what...? Lot and Block Lot Number ACRIS Property Descrip
    10·1 answer
  • Which of the following is NOT true about business incubators?
    11·1 answer
  • A company issues $15700000, 5.8%, 20-year bonds to yield 6% on January 1, 2019. Interest is paid on June 30 and December 31. The
    12·1 answer
  • In most companies, portfolio management is typically done at the sbu or ___________ level of the firm.
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!