A $1000 par value bond with 5 years to maturity and a 6% coupon has a yield to maturity of 8%. Interest is paid semiannually. Ca
lculate the current price of the bond. Group of answer choices $1579.46 $918.89 $789.29 $1000.00 $743.29
1 answer:
Answer:
$918.89
Explanation:
For computing the current price of the bond we need to apply the present value formula i.e to be shown in the attachment
Given that,
Future value = $1,000
Rate of interest = 8% ÷ 2 = 4%
NPER = 5 years × 2 = 10 years
PMT = $1,000 × 6% ÷ 2 = $30
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after applying the above formula, the current price of the bond is $918.89
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Answer:
The cost per month is increasing at a rate $365.
Explanation:
Differentiation Formula
[ where a is a constant]
Given that,
A manufacturer of handcrafted wine racks has determined that the cost to produce x units per month is given by
.
Again given that,
the rate of changing production is 13 unit per month
i.e
To find the cost per month, we need to find out the value when production is changing at the rate 13 units per month and the production is 70 units.
Differentiating with respect to t
Plugging
[ plugging x=70]
=364
[ The unit of c is not given. Assume that the unit of c is dollar.]
The cost per month is increasing at a rate $365.