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zavuch27 [327]
3 years ago
14

Randall bought a bond with a face value of $6000 and a coupon rate of 7.25%. the bond will mature in 5 years. how much interest

will he receive semiannually?
Mathematics
2 answers:
Galina-37 [17]3 years ago
7 0

Answer:

Face value of bond = $ 6000

Rate of interest =7.25 %

The Bond will mature in 5 years.

If the interest is semiannually , the rate of interest will reduce to half.

So, new rate of interest will be \frac{7.25}{2}=3.625

Formula for simple interest

=\frac{\text{Principal}\times Rate \times time}{100}

   Interest after 6 months will be

   =\frac{6000 \times 3.625 \times 1}{100}\\\\=60 \times 3.625\\\\=217.5

So, interest that Randall will receive after six months = $ 217.50

butalik [34]3 years ago
6 0
I just took a test with this question it's $217.50
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