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TEA [102]
3 years ago
7

The price of a bond is equal to the sum of the present values of its future payments. Suppose a certain bond pays $50 one year f

rom today and $1,050 two years from today. What is the price of the bond if the interest rate is 5 percent
Business
1 answer:
Studentka2010 [4]3 years ago
7 0

Answer:

The correct answer is $1,000.

Explanation:

According to the scenario, the given data are as follows:

For one year

Bond pay (p) = $50

Time period (t)= 1 year

Interest rate (r) = 5%.

So, Price of bond for 1st year = p ( 1 + r)^-t

By putting the value, we get

Price of bond for 1st year = $50 ( 1 + 0.05)^-1 = $47.62

For Second year

Bond pay (p) = $1,050

Time period (t)= 2 year

Interest rate (r) = 5%.

So, Price of bond for 2nd year = p ( 1 + r)^-t

By putting the value, we get

Price of bond for 2nd year = $1,050 ( 1 + 0.05)^-2 = $952.38

So, Total price of the bond = Price of bond for 1st year + Price of bond for 2nd year

= $47.62 + $952.38

= $1,000

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Suppose a company owns a warehouse that costs $500,000 and depreciates at $10,000 per year. If the interest rate is 5%, what is
netineya [11]

Answer: $35,000

Explanation:

Implicit rental price = Interest payment + Depreciation

Interest payment = 5% * 500,000

= $25,000

Implicit rental price is therefore:

= 25,000 + 10,000

= $35,000

4 0
3 years ago
An incentive compensation scheme includes a. ​a performance evaluation system b. ​a disciplinary action committee c. ​a reward s
Naddika [18.5K]

Answer:

The correct answer is letter "D": ​Both A&C.

Explanation:

Incentive compensation schemes are established provided by employers based on the performance of employees. Employers set a reward system that could take the form of bonuses, prizes or recognition, and goals workers should reach or pass so those rewards can be provided.  

Incentives are given at work aiming to motivate employees to work efficiently and effectively.

5 0
3 years ago
A mortgage requires you to pay $70,000 at the end of each of the next eight years. The interest rate is 8%.
bazaltina [42]

Answer:

PV $402,264.7261

balance of the mortage

1-y from now   $364,445.9041

2-y from now   $323,601.5765

3-y from now  $279,489.7026

4-y from now  $231,848.8788

5-y from now $180,396.7891

6-y from now   $124,828.5322

7-y from now   $64,814.8148

Explanation:

We sovle for the PV of the annuity of 70,00 during 8 years discounted at 8%

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 70,000.00

time 8

rate 0.08

70000 \times \frac{1-(1+0.08)^{-8} }{0.08} = PV\\

PV $402,264.7261

To know the value of the outstanding dbet we can repeat this formula changing the values for time

t = 7   $364,445.9041

t = 6   $323,601.5765

t = 5   $279,489.7026

t = 4   $231,848.8788

t = 3   $180,396.7891

t = 2   $124,828.5322

t = 1   $64,814.8148

8 0
3 years ago
________is a nonprofit organization that provides free online and in-person assistance to entrepreneurs in the form of training,
podryga [215]

Answer:

SCORE

Explanation:

<em>"SCORE’s mission is to foster vibrant small business communities through                                  mentoring and education."</em>

SCORE is a national network of volunteer business mentors that helps small businesses grow. According to their website, they have already provided  mentorship to more than 11 million entrepreneurs.

SCORE is currently a resource partner of SBA (Small Business Administration) and works with more than 10,000 volunteers.  

3 0
3 years ago
In 1973 Arab countries imposed an oil embargo on the United States and other developed countries in the aftermath of the Yom Kip
BaLLatris [955]

Explanation:

tjadhhdejejejjejejdjfjfjfnfhejdhhdhdh

3 0
3 years ago
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