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lisabon 2012 [21]
3 years ago
7

Calculate the annual interest for a $10,000 Treasury bond with a current yield of 3% that is quoted at 106 points.

Mathematics
1 answer:
Sergio [31]3 years ago
7 0

Answer:

$318

Step-by-step explanation:

The treasury bond is $10,000

The current yield is 3%

= 3/100

=0.03

It is quoted at 106 points

The first step is to calculate the price of the bond

Price of the bond= $10,000×106/100

= $10,000×1.06

= $10,600

Therefore the annual interest can be calculated as follows

Annual interest= $10,600×0.03

= $318

Hence the annual interest is $318

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