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
Semmy [17]
3 years ago
8

An investor purchases a 12-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of in

terest is 5%, what is the current market value of the bond
Business
1 answer:
marysya [2.9K]3 years ago
3 0

Answer:

Value of the bond = $862.013

Explanation:

The value of the bond is the present value of the future cash receipts expected from the bond. The value is equal to present values of interest payment and the redemption value (RV).

Value of Bond = PV of interest + PV of RV

The value of the bond can be worked out as follows:

Step 1

<em>Calculate the PV of Interest payment </em>

Present value of the interest payment

PV = Interest payment × (1- (1+r)^(-n))/r

Interest payment = $40

PV = 40 × (1 - (1.05)^(-12×2)/0.05)

= 40 × 13.7986

= 551.945

Step 2

<em>PV of redemption Value </em>

PV of RV = RV × (1+r)^(-n)

= 1000 × (1.05)^(-12×2)

= 310.067

Step 3

<em>Calculate Value of the bond  </em>

= 551.94567 + 310.067

=862.01

Value of the bond = $862.013

 

You might be interested in
The story of the Reset Button is an example of a noise caused by (select all that apply)
sukhopar [10]

Answer:

B) Cultural background

C) Emotional interference

D) Communication skills

E) Poor listening skills

Explanation:

Hitting reset button for companies is bringing the existing state of affairs back to normal, the time to hit the Reset button is when status quo or the existing state of affairs become unacceptable, when employee, employer and everything needs a wake-up call including you.

However the story of the Reset Button is an example of a noise caused by Cultural background, emotional interference, Communication skills, Poor listening skills.

4 0
3 years ago
What is artificial monopoly
MatroZZZ [7]
An Artificial Monopoly is a very huge firm wherein the production efficiency has no advantage over smaller firms but thrives all competitors out of business, remaining the sole producer of the industry. 
8 0
3 years ago
You and your spouse are in good health and have reasonably secure jobs. Each of you makes about $40,000 annually. You own a home
chubhunter [2.5K]

Answer:

$63,000

Explanation:

One of the four methods of determining insurance if the DINK method which means Double income with no kids.

To estimate the value of the insurance using this method , the sum of  , mortgage , car loans and personal debt is divided by two and added to the funeral expenses

Mortgage - 100,000

Car loan - 11,000

Personal debt - 2000

Credit card - 3000

Total = 116,000

Insurance = (116,000/2) = 58,000

Funeral expenses - 5,000

=63,000

5 0
3 years ago
Which of the following results in positive benefits to individuals, the group, or the organization? a. Functional conflict b. Em
Mumz [18]

Intergroup conflict always results in positive benefits to individuals the group or the organization.

Explanation:

The social change, decision making, reconciliation, group unity and co operation are some of the positive effects of conflicts in an organization.

The advantages of conflicts are they create awareness for the existing problems. Then by discussing the conflicting views can provide better solutions and managing conflict is quicker and more efficient.

Intergroup conflict in an organization helps the people to come out with their own ideas with creative thinking.

An example for this conflicts are the problems between management and employee and between accounting and operations team, and between UI developers and backend team.

To resolve the problems in intergroup conflict people should openly discuss about the impact that the conflict has on productivity.

6 0
3 years ago
Read 2 more answers
DeWitt Company sells a kitchen set for $345. To promote July 4, DeWitt ran the following advertisement:
Triss [41]

Answer:

$296.7

Explanation:

Since the first four hours the kitchen set will have a discount of 12 %, plus another 2 % for the last of each hour.

Ingrid bought it at the 1 hour and 25 min, that means that she could get 12 % for the first hour plus another 2 % because of th end of the first hour.

So it will be:

14 % (345) = $48.3

To the total price: $345 - $48.3 = $ 296.7

Hope this info was useful

7 0
3 years ago
Other questions:
  • A $10,000 8 percent coupon bond that sells for $10,000 has a yield to maturity of
    15·1 answer
  • If you are stopped by a police officer for driving without having all passengers under the age of 18 properly restraint, you can
    13·2 answers
  • Why are sales so important? please describe in details
    12·1 answer
  • The positioning strategy of using cost leadership or differentiation to produce a specialized product or service for a limited,
    5·1 answer
  • Describe the conventional view of the relationship between the supply of a mineral resource and its market price. What are five
    10·1 answer
  • 30PTSS PLEASE HELP ME IM REALLY BAD AT FINANCE
    13·2 answers
  • Suppose that the equilibrium price and quantity for 1 bedroom apartments in Orange County is $2,000 and 250,000 respectively. Wh
    9·1 answer
  • The AD Curve ________. A) indicates the level of aggregate output corresponding to different goods-market-clearinglevels of the
    5·1 answer
  • Flexibility of practice when applied to managerial accounting means that: Multiple Choice The information must be presented in e
    9·1 answer
  • Your daily budget is $650 and your ad clicks range in cost from $1.71 to $2.25. What's the maximum amount of clicks you could re
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!