Briar Corp is issuing a 10-year bond with a coupon rate of 7 percent. The interest rate for similar bonds is currently 9 percent
1 answer:
Answer:<em> PV = 872</em>
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Explanation:
Given:
Years to maturity (n) = 10
Coupon rate (r) = 7%
Let's assume the annual payments to be $1000
∴ Annual coupon = Annual payments × Coupon rate (r)
= $1,000 × 0.07
= $70
Interest rate (i) = 9%
We'll compute the present value using the following formula:
<em>Present Value = </em>
<em>PV = 871.65</em>
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The consideration given to the bank for providing loan facility, in return of such facility an amount is paid which is over and above the principle amount of loan, this amount can be said as interest.
Interest are of two types i.e. (a) Simple interest (b) compound interest
<h3>simple interest</h3>The amount of interest which is calculated at a fixed predetermined rate every year on the principle amount and paid until the loan is settled in full.
Given in the Question
Principle is $20,000
Rate is 3%
Time is 1 year
<h3>Calculation</h3>The simple interest is calculated by multiplying principle with the rate and than the outcome is multiplied with time to find simple interest.
Therefore the amount of interest received by Michael at the end of first year on an amount of $20,000 at a interest rate of 3%will be $600.
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Answer:
$4235350.
Explanation:
Given: Estimated fair value of the equipment= $1000000.
Estimated fair value of the building= $7000000.
Estimated fair value of the land= $2000000.
One Purchase price of equipment, building and land= $6050500.
First finding the allocated percentage share of building.
Total amount shared by building, land and equipments=
∴ Total amount shared by building, land and equipments=
Allocated percentage share of building=
⇒ Allocated percentage share of building=
∴ Allocated percentage share of building=
Now, calculating amount would the company record the building.
Amount recorded for the building=
⇒ Amount recorded for the building=
∴ Amount recorded for the building= .
Hence, amount that company would record for building is $4235350.